Each had a cascading, self-reinforcing quality, fueled by questions concerning the solvency of borrowing entities – whether deposit-taking  1  See Zoltan Pozsar, Tobias Adrian, Adam Ashcraft, and Hayley Boesky (2010), “Shadow Banking (PDF),” Staff Report No. 458 (New York: Federal Reserve Bank of New York, July). BIS central bankers’ speeches  1  banks or dealers seeking credit in repo markets.
But there has been a clear difference in the pace of convergence.2 Countries that have joined the EU, and which are hereafter referred to as the central and eastern European (CEE) economies,3 reached GDP per capita levels of 70% of the EU average.