By Michael Winfrey and Gareth Jones
PRAGUE/WARSAW, March 4 (Reuters) - Eastern European bank
supervisors expressed concern on Wednesday about "misleading"
comments on risks in their financial sectors, and said they
could hurt the region's economies and banks.
Poland's central bank governor also said he wanted to start
talks with the European Central Bank and the EU's executive to
limit aid to "financial institutions that speculate on financial
markets" in emerging Europe.
The EU's eastern members came under sharp scrutiny last
month when mainstream global media posted front page stories
about the long-building economic imbalances in some states, with
some articles including references to the region as "the
sub-prime of Europe".
Officials in better-off states like the Czech Republic and
Poland have tried to fight back, saying they are far different
from regional laggards Hungary or Latvia, which have sought
IMF-led bailouts to shore up their economies.
In a joint statement, supervisory authorities from Poland,
the Czech Republic, Slovakia, Romania and Bulgaria said
"publicly announced initiatives" highlighting the exposure that
banks in western EU members have to central and Eastern Europe
were undermining their efforts to uphold stability.
"The published information... are often oversimplified and
misleading, and it can have a negative impact on banks that are
operating in these countries," said the statement, published on
the Slovak central bank's website.
"Such self-fulfilling speculation totally disregards
fundamental economic developments in the CEE countries and
creates misperceptions that could inevitably be detrimental to
both the CEE region and Europe as a whole."
The statement did not specify what it meant by "publicly
announced initiatives". Full text at []
Analysts, who note the once-booming region is facing at best
a massive slowdown in growth, were unimpressed by the central
banks' statements and said it would do little to calm market
nerves around the region.
They noted Hungary was not among those that had signed and
said a lack of clear policy for the region as a whole continued
to undermine the situation, regardless of whether some countries
were economically stronger than others.
Hungary's forint on Wednesday fell 2 percent to a record low
of 310.56 per euro as investors shorted it against its regional
peers. The Polish zloty and Czech crown, in contrast, were more
or less steady.
SPECULATORS
Polish central bank Governor Slawomir Skrzyrpek criticised
"speculators", a growing trend in the region's largest economy
in which media and politicians have blamed foreign investment
banks for a 33 percent drop in the zloty currency since July.
"Our aim should be to implement measures that would limit
incidence of granting public help to financial institutions that
speculate on financial markets of the new member states and
emerging economies," he said.
"I shall endeavour to initiate a discussion on this subject
within the ECB and the European Commission."
Analysts were sceptical such a move could gain any ground,
particularly with western EU members scrambling to uphold their
banking sectors with billions of euros in capital injections and
in some cases the outright nationalisation of flagging lenders.
"The statement doesn't give any hints of new policy measures
to shore up individual markets, and that's disappointing," said
Koon Chow, a strategist at Barclays capital.
"Also, a bit incongruous is the absence of Hungary in the
statement, which once again underscores problems in policy
cohesion among EU members, and this statement underscores the
lack of cohesion among the new EU members."
Chow and other analysts have suggested that markets will not
begin to differentiate between the fundamentals of different
states until they all agree on a common plan to underpin
confidence in the region as a whole, possibly including EU and
IMF funds, ECB credit lines, and other emergency measures.
(Additional reporting by Warsaw bureau)
