dominant, i. e. the rapid credit expansion can to a large extent be attributed to a continuous improvement in the macroeconomic fundamentals and the initial low credit volume in these countries. however, there are notable differences across the region : the baltic states ( especially latvia and estonia ) and south - east european countries ( especially croatia and bulgaria ) seem to have approached or even reached the equilibrium by 2004 or 2005, whereas in the case of the visegrad countries ( especially the czech republic and poland ) the credit - to - gdp ratio seemed to remain below its estimated equilibrium level at that time. of course, it might well be that some of the cee economies have overshot the kiss, g., nagy, m., vonnak, b. : credit growth in central and eastern europe : trend, cycle or boom?, mnb working paper no. 2006 / 10, november 2006 and egert, b., backe, p., zumer, t. : credit growth in central and eastern europe : new ( over ) shooting stars?, ecb working paper no. 687, october 2006. equilibrium only recently, but one has to wait for a while until the relevant data become available before this overshooting can be captured in empirical analyses. the general upshot of these papers is that the rapid credit expansion in cee economies has mainly been fuelled by demand factors : the buoyant economic growth and the ensuing increases in disposable incomes, rising expectations with regard to future income prospects related to eu accession, remarkable decreases in interest rates, and falling or low and stable inflation rates. a similar message emerges from two papers presented in session 3, which have scrutinized the factors that contributed to the very rapid credit expansion in the specific cases of romania 2 and lithuania 3, and from the world bank report 4 presented in session 6, which provides a detailed overview of the recent credit developments in all ten new eu member states from central and eastern europe. while stressing the demand factors that have fuelled the expansion of credit to the private sector, these papers also point out that the supply side has played a role too : the boost in credit volume was made possible by the privatisation of banks, deregulation of financial systems, and the deepening of the financial markets in the region. both the above - mentioned world bank report and the paper 5 prepared by international monetary fund staff, also presented in session 6, were

two days have stressed the necessity of prudential supervision of the banking system in the face of a credit boom. even though financial deepening and capital inflows bring about long - term benefits that can hardly be overstated, in the short to medium run they can lead to imbalances and distortions that pose a threat to the macroeconomic stability of a country. we have recently seen how badly lax lending and improper credit risk management can end in developed countries. in the case of converging economies, which are generally more financially vulnerable than fully - fledged market economies, it is all the more important to closely monitor risks to the financial system, enhance cooperation between financial institutions and supervisory authorities, and impose prudential constraints on lending. * the ideas that i have summarized so far were expressed in the papers prepared and presented by economists from academia, central banks, and international financial institutions. we have also heard important voices of top commercial bank executives and central bank governors during the panel that has just ended. household credit, and mortgages in particular, will remain an important source of revenues and profits for commercial banks. at the same time central bankers and banking sector supervisors will likely watch credit developments very closely to make sure that best lending practices are in place. in closing, i would again like to thank you all for attending the conference. i would like to thank the organizing committee and the nbp staff for their excellent work. i hope to meet you again at another conference organized by the national bank of poland. thank you.