Ten years after the start of transition in Central and Eastern Europe the initial euphoria has given way to wide-spread disillusionment. Virtually all former socialist economies have gone through a deep economic recession with a collapse in output, falling real incomes, and a surge in...

Ten years after the start of transition in Central and Eastern Europe the initial euphoria has given way to wide-spread disillusionment. Virtually all former socialist economies have gone through a deep economic recession with a collapse in output, falling real incomes, and a surge in...

Financial market imperfections and especially the bad debt problem are among the most important factors impeding economic restructuring in transition economies. This paper analyses the implications of non-performing loans for the lending policy of banks and for the ensuing allocation of credit....