Flows of bank loans to the domestic non-financial private sector were, along with changes in competitiveness, the most important factors in the build-up of current account imbalances in eurozone countries before the financial crisis, a discussion paper published this week by the Deutsche Bundesbank says.

In Asymmetric credit growth and current account imbalances in the euro area, Robert Unger estimates the impact of domestic credit growth on the current accounts of eleveneurozone countries