The transition of banking in Central and Eastern Europe was nothing short of remarkable. All these countries now have market oriented banking systems that are largely free of government influence. This success is often attributed to the influence of foreign banks that brought modern technology...

Although the performance and privatization of transition banks have been widely studied already, little is known about their risk taking and risk management activities. We use a new EBRD survey data set of banks to examine risk taking by banks in the transition countries. We find no indication...