Danger of Capital Flight from Eastern Europe

EurActiv has a startling report this evening which partly explains some of the recent EU hysteria over Hungary, linked here. The following briuef quote provides an idea of the seriousness of the problem which appears to have been discussed yesterday in Vienna:


Up to 12 of the 16 key western banks in Eastern Europe, under pressure from regulators to recapitalise, have resorted to shrinking outside their home markets to beef up capital levels, the EurActiv network recently reported.
Many of the foreign banks that dominate the region – including UniCredit of Italy, KBC of Belgium, Commerzbank of Germany and Raiffeisen of Austria – have suffered as a result of the eurozone debt crisis. Several are reportedly limiting credit availability for Eastern Europe in an effort to recapitalise their home bases.
After the downgrading of Austria's AAA rating by Standard & Poor's - in part due to its banks' exposure abroad - Berglöf said banks could be posed to more swiftly reduce their exposure in Central and Eastern Europe.