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The euro-region debt crisis may deepen as eastern European borrowers who took loans in a strengthening Swiss franc struggle to repay western European banks, UBS Wealth Management said.
Lenders including Unicredit SpA (UCG), Erste Group Bank AG (EBS), Raiffeisen Bank International AG (RBI) and Bayerische Landesbank have 80 billion Swiss francs ($101 billion) of household debt in Hungary, Poland and Croatia, emerging-markets analyst Kilian Reber said.
He assigns a 20% to 30% chance of a stronger franc triggering defaults in eastern Europe and fanning the euro-region debt crisis by forcing western European banks to seek new bailouts.
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