【正文】 an banks. Hence, Croatian banks faced a currency mismatch between assets and liabilities creating large holes in their balance sheets after succession. At the end of 1995, four Croatian banks were selected for government rehabilitation because of the poor quality of their loan portfolios. Involvement in this program resulted in these banks being nationalized so that four large stateowned banks were created in Croatia in the middle of the 1990s. The three more advanced TEs, ., Czech Republic, Hungary, and Poland, embarked on significantly different bank privatizations programs during the first half of the 1990s. Even before the political change, the Hungarian government had been receptive to foreign bank activity as it allowed three foreign banks to operate in the country from 1985. By the end of 1994, the Hungarian foreign trade bank had been purchased by a foreign owner and foreign investors held about 20% of total banking assets in Hungary. In the Czech Republic, three of the largest four banks participated in the first wave of voucher privatization in 1992. Both of the southeastern TEs,., Bulgaria and Romania, began bank privatization only in the late In 2000, foreign investors owned less than half of Romanian banking assets and two of the three largest banks remained stateowned as late as 2003. Beginning in 1995 with virtually no Although the Czech government In Croatia, only one small foreign bank was operating in 1995 and there was hardly any foreign ownership of With some inducement from the G7 donor countries and international financial institutions, Polish authorities set a three Investment funds, the largest of which were created by these banks, were an integral part of the Czech voucher privatization program. Hence, this initial divestiture of state holdings resulted in interlocking ownership with the state retaining large controlling stakes of voucherprivatized Czech banks. At the end of 1994, although foreign investors held about 6% of banking assets in the Czech Republic, none of the large banks had any foreign ownership. year timetable at the beginning of 1993 for privatizing the nine mediumsized, regional, stateowned banks that were created from the mercial portfolio of the national bank. However, by the end of 1994, only two of these banks had been privatized and only two more would be privatized before 1997. Foreign ownership of banking assets remained insignificant in Poland at about 2% in the mid1990s.Macroeconomic instability and financial sector distress made bank privatization infeasible in Bulgaria and Romania during the first half of the 1990s. By 1995, neither Bulgaria nor Romania had privatized any banks and foreign ownership of banking assets was negligible at less than 1% in both countries. banking assets. Of the six countries, only Hungary and to a lesser extent Poland had mitted to selling banks to foreign investors by the end of the first half of the , by the end the decade, five of the six countries were embarked on, or had pleted, privatizations that would put at least 75% of their banking assets under foreign control by 2002. The second half of the 1990s witnessed a flurry of bank privatizations in these countries. Appendix A lists the banks in our sample from each country ranked according to market share at the end of the decade. Information on each bank’s status throughout the 1990s is provided and, when relevant, the bank’s privatization is dated. Bank privatization proceeded relatively swiftly in Hungary。 Wachtel, 1. Introduction A construct Banking sectors in the transition economies of Central and Southeastern Europe were restructured dramatically the with a financial organization that, in most cases, was designed to support the central planning apparatus, new governments move