EBRD: European Bank for Rip-off Deals?
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EBRD: European Bank for Rip-off Deals?

Has the European Bank for Reconstruction & Development outgrown its usefulness in Hungary, Poland and the Czech Republic? Some financiers believe the EBRD should concentrate on less-advanced countries with less developed capital markets. In Hungary they see it as a rival ­ aggressive and deal-hungry as any merchant bank. David Shirreff reports.

Time to move on? - EBRD investment in selected countries
(as at February 28 1997) Ecu millions

Country  

Total

Private

Public

Russia

2,646.60

2,336.50

310.2

Hungary

1,039.70

960.4

79.4

Poland

947.3

839.2

108.1

Romania

876.2

302.7

573.5

Slovak Republic

439.4

380.4

59

Czech Republic

391.4

320.7

70.6

Slovenia

330.4

157.8

172.6

Source: EBRD

Investment bankers and fund managers are happy to criticize the European Bank for Reconstruction & Development (EBRD) in private, but few will do so on the record. One of the few is Peter Rona, chairman and CEO of the First Hungary Fund, which has $130 million invested in Hungarian companies. Hungary is where the EBRD embarked on its mission, with its first loan to the private sector in 1991 and its first equity stake in early 1992.

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