*  *  *  I wish to thank for useful discussion and help Emidio Cocozza, Paolo Del Giovane and Valeria Rolli. Introduction The global financial crisis has been severe and widespread, affecting different economies in different and long-lasting ways.
The transition countries of Central and Eastern Europe1 have been no exception: their quite rapid financial integration over the past twenty-years has brought enduring economic benefits but also left them relatively more exposed to the global financial turmoil, through their links with Western European banks, which hold dominant stakes in the region’s markets.