In recent years, most countries in Central and Eastern Europe, Member States of the EU, that we selected for the analysis (Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania) have recorded a significant expansion of lending in foreign currency, which was one of the major factors of the accelerated growth of loans to economy. Such developments have led to an increase of indebtedness in foreign currency of the non-financial private sector, especially of the households and of the accumulation of major macroeconomics and financial imbalances.

The issue of lending in foreign currency, the determinants of increasing the share of loans in foreign currency and the risks generated at the level of financial stability are the subject of numerous studies, including: Basso, Calvo-Gonzales and Jurgilas (2007); Rosenberg and Tirpak (2008); Csajbók-Andras et al. (2010); Zettelmeyer, Nagy and Jeffrey (2010).

Another significant issue addressed in the specialized literature regarding foreign currency loans refers to the role of monetary policy in limiting growth of these loans. Thus, in addition to those noted studies we remark other studies, such as: Kiss et al. (2006); Sirtaine and Skamnelos (2007); Hilbers et al. (2006); Brzoza-Brzezina et al. (2010).

Our paper complements the specialized literature on the approached subject, in particular, by highlighting and discussing current issues of high interest for policymakers, both at national and European level regarding lending in foreign currency.

The extremely negative implications of lending in foreign currency on financial stability in most countries under review, outlined clearly in the context of the current crisis, determined the focus of the policymakers concern, both at European and national level, regarding the issue of foreign currency loans, which became one of the most discussed issues on the agenda of the monetary-financial authorities.

The aim of our research is to comparatively underline, based on the example of the panel countries, a few stylized facts about lending in foreign currency, and also the main factors which determined the growing share of loans in foreign currency, the risks for financial stability generated by the loans denominated in foreign currencies and the challenges that arise for the monetary-financial authorities, both at national and European level, in the current context and in the post crisis period.

The methodology used in our paper starts with an extensive literature review in order to underline the importance of the research theme approached. The analysis is based on information and statistical data provided mainly by the official statistics of the ECB, IMF, EBRD, Raiffeisen Research, different reports, studies and researches.

Through the content of our research we want to underline the crucial importance of a rigorous monitoring of the foreign lending activities undertaken by the central banks and the supervisory authorities in order to limit the risks and to ensure the financial stability at EU level.