Risk Taking by Banks in the Transition Countries

  • Rainer Haselmann
  • Paul Wachtel


The banking sectors of the transition countries have progressed remarkably in the last 15 years. In fact, banking in most transition countries has largely shaken off the traumas of the transition era. At the start of the 21st century banks in these countries look very much like banks elsewhere. That is, they are by no means problem free but they are struggling with the same issues as banks in other emerging market countries. There have been a surprisingly large number of studies that have told us about the performance of these banks but we know very little about their risk taking behaviour and how the banking environment influences it.


European Union Risk Measure Credit Risk Former Soviet Union Transition Country 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Berger, AN, Klapper, LF and Udell, GF. (2001): The ability of banks to lend to informationally opaque small businesses. Journal of Banking & Finance 25(12): 2127–2167.CrossRefGoogle Scholar
  2. Berger, AN and Udell, GF. (2002): Small business credit availability and relationship lending: The importance of bank organizational structure. Economic Journal 112(477): F32–F53.CrossRefGoogle Scholar
  3. Bester, H. (1985): Screening vs. rationing in credit markets with imperfect information. American Economic Review 75(4): 850–855.Google Scholar
  4. Bonin, J and Wachtel, P. (2003): Financial sector development in transition economies: Lessons from the first decade. Financial Markets Institutions and Instruments 12: 1–66.CrossRefGoogle Scholar
  5. Bonin, J and Wachtel, P. (2005): Dealing with financial fragility in transition economies. In: Evanoff, D and Kaufman, G. (eds). Systemic Financial Crises: Resolving Large Bank Insolvencies. World Scientific Publishing Company: Hackensack, NJ, USA.Google Scholar
  6. Bonin, J, Hasan, I and Wachtel, P. (2005a): Bank performance efficiency and ownership in transition countries. Journal of Banking and Finance 29: 31–53.CrossRefGoogle Scholar
  7. Bonin, J, Hasan, I and Wachtel, P. (2005b): Privatization matters: Bank performance in transition countries. Journal of Banking and Finance 29: 2155–2178.CrossRefGoogle Scholar
  8. Claeys, S and Schoors, K. (2007): Bank supervision Russian style: Evidence of conflicts between micro- and macro-prudential concerns. Journal of Comparative Economics.Google Scholar
  9. Corbet, J and Mayer, C. (1992): Financial reforms in eastern Europe: Progress with the wrong model. Oxford Review of Economic Policy 7(4): 5–75.Google Scholar
  10. de Haas, R and van Lelyveld, I. (2006): Foreign banks and credit stability in central and eastern Europe: A panel data analysis. Journal of Banking and Finance 30: 1927–1952.CrossRefGoogle Scholar
  11. EBRD. (2004): Legal transaction programme, Internet database, European Bank for Reconstruction and Development,, accessed on 11 August 2006.
  12. EBRD Transition Report. (2006): Finance in Transition. European Bank for Reconstruction and Development: London.Google Scholar
  13. Fries, S and Taci, A. (2005): Cost efficiency of banks in transition: Evidence from 289 banks in 15 post-communist countries. Journal of Banking and Finance 29: 55–81.CrossRefGoogle Scholar
  14. Fries, S, Neven, D, Seabright, P and Taci, A. (2006): Market entry, privatization and bank performance in transition. Economics of Transition 14: 579–610.CrossRefGoogle Scholar
  15. Haselmann, R. (2006): Strategies of foreign banks in transition economies. Emerging Market Review 7: 283–299.CrossRefGoogle Scholar
  16. Haselmann, R, Vig, Vand Pistor, K. (2006): How law affects lending. Columbia Law School, Working Paper 285.Google Scholar
  17. Haselmann, R and Wachtel, P. (2006): Institutions and bank behavior. New York University, Stern School of Business, Working Paper EC06–16.Google Scholar
  18. Hoshi, T (2006): Creditor rights and credit creation by banks in transition countries: Evidence from BEPS, EBRD, Tokyo Conference, University of California, San Diego.Google Scholar
  19. Kager, M. (2002): The banking system in the accession countries on the eve of EU entry. Austrian Central Bank, Working Paper.Google Scholar
  20. La Porta, R, Lopez-de-Silanes, F, Shleifer, A and Vishny, R. (1997): Legal determinants of external finance. Journal of Finance 52: 1131–1150.CrossRefGoogle Scholar
  21. La Porta, R, Lopez-de-Silanes, F, Shleifer, A and Vishny, R. (1998): Law and finance. Journal of Political Economy 106(6): 1113–1155.CrossRefGoogle Scholar
  22. Pistor, K. (2000): Patterns of legal change: Shareholder and creditor rights in transition economies. European Business Organization Law Review 1: 59–108.CrossRefGoogle Scholar
  23. Qian, J and Strahan, PE (forthcoming): How law and institutions shape financial contracts: The case of bank loans. Journal of Finance.Google Scholar
  24. Schardax, F and Reininger, T (2001): The financial sector in five central and eastern European Countries: An overview. Focus on Transition 1/2001 Austrian Central Bank: Vienna.Google Scholar
  25. Tang, H, Zoli, E and Klytchnikova, I. (2000): Banking crises in transition countries: Fiscal costs and related issues. World Bank Working Paper, No. 2484.Google Scholar
  26. Udell, G and Wachtel, P. (1995): Financial system design for the formerly planned economies: Defining the issues. Financial Markets Institutions and Instruments 4(2): 1–59.Google Scholar
  27. Weil, L. (2003): Banking efficiency in transition economies: The role of foreign ownership. Economics of Transition 11: 569–592.CrossRefGoogle Scholar

Copyright information

© Rainer Haselmann and Paul Wachtel 2016

Authors and Affiliations

  • Rainer Haselmann
    • 1
  • Paul Wachtel
    • 2
  1. 1.University of MainzMainzGermany
  2. 2.Stern School of BusinessNew York UniversityNew YorkUSA

Personalised recommendations