The role of the foreign banking sector in CESEE countries, which despite having been beneficial overall for the catching-up process, may have contributed to increasing domestic imbalances in some countries. 3. The establishment of a new macro-prudential and regulatory framework in the European Union (EU). 1.
The experience of growth in the CESEE region  Before the global financial crisis erupted, the CESEE region was experiencing an economic boom, with rapid GDP growth that could be attributed to domestic and international factors. The widespread and enduring process of convergence of living standards and prices towards euro area levels prompted considerable optimism about the future.