Why do firms default on their foreign currency loans? The case of Hungary

The macroeconomics of carry trade gone wrong: Corporate and consumer losses in Emerging Europe

“…Default rates rose. Vonnák (2018) shows that foreign currency denomination worsen loan performance in Hungary considerably, although other factors such as self-selection of low quality firms matter as well. Direct empirical evidence in favor of corporate debt overhang in Emerging Europe is scarce, but Kalemli-Özcan et al (2018) provides evidence in favor corporate debt overhang in the core and periphery countries in Europe after the Lehman crisis.…”

Döviz Cinsi Krediler Bir “Döviz Riski” Azaltma Araci Mıdır? 2003-2018 Türkiye Analizi

“…Sonuç olarak, Polonya ve Macaristan'da para politikası sıkılaşmasına tepki olarak yerel para cinsinden kredilerdeki düşüşe ve döviz kredisi artışına işaret ederek, döviz kuru borcunun varlığının para politikasının aktarımını zayıflattığını tespit etmiştir. Vonnák (2018), Kriz zamanlarında farklı para birimlerinde borç alan firmaların döviz performanslarının döviz kuru seçimine etki derecelerini araştırmıştır. Ayrıca, Macaristan üzerine yaptığı araştırmada, yerel para birimi borçlularına kıyasla, yabancı para borçluların daha kötü kredi performansına katkıda bulunan faktörleri ayrıştırmayı amaçlamıştır.…”

Foreign currency borrowing surrounding the global financial crisis: Evidence from Korea

“…() find that while small Lebanese firms with more collateral and higher net worth are likely to access US dollar debt, profitable firms are less likely to use such debt. Vonnák () notes the important role of the characteristics of FC borrowers such as credit status in assessing FC loan performance, contrary to existing researchers' attention to those of FC lenders per se in Eastern European countries surrounding the GFC. The second stream of research deals with FC borrowing by households, rather than by business firms.…”

“…Second, our study sheds new empirical light on how the intervention of the 2007 global financial crisis affected firms’ FC borrowing behaviour. The current literature offers rich empirical evidence about FC borrowing surrounding the Asian financial crisis and some evidence surrounding the 2007 GFC; the latter, however, is limited to European firms, with little evidence for emerging market Asian firms surrounding the GFC (see, e.g., Brown & De Haas, ; Brown et al., , ; Vonnák, ; Zettelmeyer, Nagy, & Jeffrey, ). As global capital markets, including emerging markets, suffered a substantial decline in economic activities with a lack of credit following the crisis (Dooley & Hutchison, ), FC borrowing of emerging market firms may exhibit different characteristics after the GFC than before the GFC.…”