Central and east Europe will not escape from the effects of the global market turmoil, a senior international banker warned yesterday. Financial Times

Varel Freeman, first vice-president of the European Bank for Reconstruction and Development, sought to temper expectations that the fast-growing region might ride out the upheavals caused by the US sub-prime crisis.

'I don’t intend to be a pessimist but I think there’s a degree of realism needed,' he said. 'One has to recognise the risks in these markets, and that given the state of international markets, the risks are definitely greater than six months ago.

'By and large, the financial community is slow to acknowledge these changes and certainly ministers and central bank governors [understandably] want to put the best light on their economies,' he said on the fringes of the Euromoney central and eastern European forum in Vienna, where he delivered a similar message to bankers and officials from the region.