Most Britons will remember the financial crisis surrounding Northern Rock last year and the dramatic bank run which then ensued. Northern Rock was very heavily affected by the subprime crisis in the United States and as such, it faced liquidity problems.

Financial institutions in much of Eastern Europe have been more fortunate and unlike some of their western counter-parts, the majority of banks have not struggled with the same liquidity problems.

There are a number of reasons for this, but one of the most important ones is that many of these financial institutions focus on asset management, rather than on liability management.

Asset management simply means that the main activity of these banks concentrate on operating savings and chequing accounts for clients, or various investment certificates, rather than on providing large loans to major corporations.

Most intermediate size banks operating in Eastern Europe—such as Hungary’s OTP (Országos Takarék Pénztár) credit union and its Slovak branch, OTP Banka Slovensko—have placed a much stronger emphasis on securing the funds necessary to maintain its business from individual deposits, but also by providing loans to small private companies. This simply means that the bank’s liquid cash tends to come from money deposited in savings accounts.

In contrast to this, many of the West’s banking giants have little choice but to rely on loans from larger lenders or lending institutions, in order to fund their main business, which involves dealing with international corporations or governments.

Eastern European banks are less involved in this high stakes industry and as such, they have generally been less exposed to some of the biggest risks and negative consequences that are now being felt due to the subprime crisis and credit crunch.

The strategy of east european banks has paid of protecting their own local markets - including property -from a free fall in asset prices such as property.

All this means that countries like Slovakia are poised for continued economic growth which is good news for the property market.