Recent updates have concluded that the financial troubles within emerging Europe are manageable, and that assistance need not be large in efforts to salvage markets and related exchange traded funds (ETFs).

European banks are now being encouraged to stop their loose lending practices, which had led to a credit bubble within the emerging Europe region. Boris Groendahl for Reuters reports that this includes loans in foreign currencies and in excess of banks’ deposits. Problems will be easily managed, however, there is a need for a shift in business models previously used.

European Central Bank official Ewald Nowotny praised Slovakia’s banks and regulators for enforcing tight standards, including a ban on the retail foreign currency lending that has been rampant in Hungary, Romania and the Baltics, and to an extent, Poland.

The G-20 Summit meeting that took place last weekend held a promise to provide funding for emerging markets, great news amid worsening conditions. Brewer Investment Group on Forex TV reports that for weeks there has been talk of Central and Eastern European bank collapses because of exposure to toxic loans.

Over the weekend, the G-20 nations promised aid to the struggling emerging market nations, although no details of the plan have yet been revealed.

  • SPDR S&P Emerging Europe (GUR): down 5.1% year-to-date; up 4.4% in the last week; note that GUR is above its 50-day moving average

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.