As the eurozone shuddered under the weight of its sovereign debt crisis, the economies and banks of neighbouring countries, especially in southeastern Europe, were left with little hope other than that a Russian or Turkish bank would be sufficiently foolhardy to make a big investment in a local bank. It didnt happen.
But the tide is turning. The eurozone is gradually recovering and many smaller CEE nations have deleveraged in their government finances and banking sectors. Russia and Turkey, meanwhile, are left with the aftermath of a boom that only dipped briefly before firing up again in 2010.
Russias vulnerability lies in its governments over-reliance on an oil price that remains high, but could easily dip (particularly if more Iranian supply comes to global markets). Vladimir Putin has secured his third term as president, but it was at a cost to government finances and to the financial system.
As in other emerging markets but less so in other central and southeastern European countries, outside Turkey Russian banks have grown strongly in recent years. But partly thanks to the fiscal splurge, the sector is too reliant on consumer finance, where a bubble has inflated in some parts of the population.
Little wonder, then, that for 2014 Barclays expects credit growth to pick up in the four big main central European economies, while credit growth in Russia and Turkey slows.
Romania is perhaps the best example: after 2008 many forgot about the country. But its efforts to clean up state finances have paid off (with another successful Eurobond issue in September, after the completion of an IMF programme in July). Privatization has also made progress.
A reduction of the current-account deficit over the past two years has also put Poland, as Romania, in a good position to withstand the increased aversion to global emerging markets (such as Turkey) and steadily leverage off the improving story in the eurozone.