Published by the Royal Bank of Canada the following table is very interesting.

(table has been uploaded - why its not showing yet - I dont know)

The analysis of our regions of interest are based on the following ....

“The three Baltic States, along with Ukraine, Kazakhstan, Bulgaria and Romania and off course Iceland are at the top of the list. But Euro-convergence plays - Poland and Hungary - and Turkey, one of the most widely traded EM markets, are all well up the table."

“Some EMEA countries do not have the liquidity to support their financial sectors in the same way that the US and Western Europe have been able to bailout their banking systems."

These include: Hungary, Romania, Latvia, Lithuania and Estonia.

“Foreign parent company support for local banks normally provides some reassurance. But in the present environment most parent banks are likely to be more concerned about conditions in their home market and therefore have limited capacity to provide any sizeable liquidity boost overseas. In this respect, the (overvalued) pegged FX systems in the Baltic States (where Swedish banks have a large presence) add a further element of risk."

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I might add that Hungary no longer has a fixed pegged FX system and that the EU Bank is now providing potentially unlimited lending to Hungary (dont know about the other countries).

So that list although just published is likely to be out of date and wrong, the idea that Hungary is somehow one of the most vulnerable countries is just rubbish - I continually hear that Hungary is too risky from people not just here on this forum but elsewhere.

In reality it is one of the most stable places in the region, second only to the Czech Republic in this respect.

Richard from today's FT. Not pretty reading for Hungary

IMF ready to help stabilise Ukraine
By Krishna Guha in Washington, Stefan Wagstyl in London, Thomas Escritt in Budapest and Roman Olearchyk in Kiev

Published: October 16 2008 19:20 | Last updated: October 17 2008 01:00

The global credit crisis took a fresh turn on Thursday as Hungary and Ukraine approached international institutions for support in an effort to avoid following Iceland into financial turmoil.

The moves came as figures showed that US industrial production plummeted 2.8 per cent in September, its largest monthly decline since 1974, though the decline was aggravated by hurricane disruption and a strike at Boeing, the aerospace company.

The mood in Europe was unsettled as Budapest received a €5bn credit facility from the European Central Bank and Kiev said it was seeking an IMF loan of up to $14bn to “stabilise Ukraine’s financial system”. It was the first time in the 15-month credit crunch that multilateral agencies such as the International Monetary Fund had taken steps that are likely to lead to a bail-out of continental European countries – a clear sign of the acute difficulties debtor nations face in raising finance from credit-starved ­markets.

The International Monetary Fund is on an emergency footing and will do everything in its power to support vulnerable emerging economies caught up in the global financial crisis, its chief, Dominique Strauss-Kahn, vowed on Thursday.

“The crisis is now hurting a lot of emerging markets,” he told the Financial Times in an interview. “Some of them may face balance of payments problems.”
“Many countries seem to be experiencing problems because of the repatriation of private capital by foreign investors or the reduction of credit lines from foreign banks,” Dominique Strauss-Kahn, IMF managing director, told the Financial Times. “We are ready to support these economies and we are in discussions with a number of them.”

Hungary’s problems stem from foreign currency loans and big budget deficits. Ukraine’s banks face difficulties repaying foreign credits as the current account is widening. Authorities in both countries insisted they were not in difficulties.

The eastern European moves came as fears of a global recession triggered unprecedented volatility in the markets.

The S&P 500 closed up 4.3 per cent, after having been down as much as 4.6 per cent. Wall Street’s fear gauge – the Chicago Board Options Exchange Volatility Index, or the Vix – hit a record 81.17 during the day.

The Federal Reserve said its balance sheet had swelled another $179bn in the past week, driven by a sharp increase in lending through its credit ­auctions and to foreign central banks in the shape of offshore dollar loans.

The Fed’s balance sheet now stands at $1,772bn – double its size a year ago.

Earlier, Japan’s Nikkei 225 index fell 11.4 per cent, its worst one-day decline since the 1987 stock market crash. The FTSE 100 in London closed down 5.3 per cent at a five-and-a-half year low.

Yes, same news as the other day ..... problem solved, just watch as all the other countries above Hungary in that list follow Hungary's lead. They will all be at it soon enough, - borrowing from the ECB.

Hungary has a more developed banking sector than any of the other countries in the region thus it was bound to be one of the first to seek aid and thus solve the problem.