VIENNA Dec 18 The biggest foreign banks active
in emerging Europe are trying to convince governments in the
region to create their own stability packages rather than rely
on the Western home countries of the dominant banks.
The banks are also trying to persuade regulators, the
European Central Bank and Brussels to coordinate measures to
counter the impact of the financial crisis on the region.
The banks met first in early November after initial talks at
a World Bank meeting in October and agreed on issues in their
common interest to safeguard financial stability in the region,
one of the banks said.
Convincing emerging European governments to create their own
stability packages is one of the main goals, a Raiffeisen
International spokesman said.
"This is mainly about raising awareness, about starting a
process to think about national measures in those countries to
bring liquidity back in the markets," said Michael Palzer.
"There was little initiative at the time coming out of the
(emerging European) countries with the exception of Russia,"
Palzer said. "It seemed as if the prevailing attitude was, 'The
home countries will solve that for us'."
Doubts over Western banks' commitment to emerging Europe
loomed large when investors dumped Hungarian assets in October,
and the Hungarian central bank called on them to publicly
confirm their commitment to the country despite the crisis.
The market share of international banks ranges from a low of
65 percent in Poland to almost 100 percent in the Czech
Republic, making the region's businesses and consumers dependent
on uninterrupted capital inflows from Western Europe.
Foreign market shares in the former Soviet Union are less
significant because the main banks are still domestically owned.
Among the measures the bank group is lobbying for are
reduced requirements to hold reserves at the central banks of
the host countries. They also want to encourage the ECB to
pledge liquidity support for those markets.
Palzer declined to say which banks were taking part in the
discussions, but sources familiar with the group said they were
the six biggest western banks active in the region.
They are: Italy's UniCredit (CRDI.MI) and Banca Intesa
(ISP.MI), Austria's Raiffeisen International RIBH.VI and Erste
Group Bank (ERST.VI), France's Societe Generale (SOGN.PA) and
Belgium's KBC (KBC.BR).
Among them, UniCredit is biggest in Poland and Bulgaria,
Erste is top in Romania, Slovakia and the Czech Republic, KBC in
Hungary, Intesa in Serbia, and Raiffeisen in Russia and Ukraine.
Hungary's OTP Bank OTPB.BU, the No. 5 lender in emerging
Europe and biggest in its home country, is not part of the
group, according to those sources.
(Reporting by Boris Groendahl; editing by Elaine Hardcastle)