In other European countries such as Hungary and Latvia, this indirect cross-border credit was even more important in the run-up to the crisis. Much of this reflected the (interoffice) channelling of funds by foreign banks outside these countries to their subsidiaries in these countries (left-hand panels, dashed brown line), which in turn extended foreign currency loans to residents (right-hand panels). In the Baltic states combined, for example, credit extended by subsidiaries of foreign banks located in these countries accounted for 80% of total bank credit to non-banks, mostly euro-denominated
