At the same time, the crisis has clearly revealed that the catching-up process must go hand-in-hand with macro and financial-oriented policies, while specific challenges remain for countries that maintain hard pegs, which require adequate support measures. 2. The role of the foreign banking sector in CESEE countries  Let me now turn more specifically to the “parent bank” model in CESEE.
At a broader level, it is still controversial whether international financial integration and foreign banks have an unambiguously positive effect on economies that are in the process of catching up.