The United States had been running enormous deficits for more than a decade and the cost to the Federal government was ballooning into the trillions of dollars. At precisely this time period the Cold War was ending, and debates about a Marshall Plan for Eastern Europe were beginning in earnest. The debt issue was a dark cloud hanging over any significant economic initiatives. As some noted, the debt bomb may turn out to be more dangerous to the future of Europe than the atomic bomb.

By early 1992, it was obvious that there would be no Marshall Plan for the East. Western governments were applying piecemeal solutions and high-priced consultants as an answer to hyperinflation and unemployment - notwithstanding that these were the same dynamics that brought down the Weimar government in Germany and the nascent democracies of Central-East Europe in the Thirties. EWI has been good at sensing high-leverage gaps where a modest investment can pay off with serious results. Our decision to open the EWI Banking and Financial Assistance Centre in Budapest was based on knowledge that hundreds of banks and financial institutions were passing into new hands but these senior managers often had no prior experience. Overwhelmed and unwilling to "come clean" with a younger generation of colleagues in the many banking seminars being offered by the West, these managers were in a quandary. EWI created an institution, financed and staffed largely by European and U.S. banks. After several years, most top managers have taken several EWI courses.

The Budapest based Banking and Finance Assistance Centre, conceived by EWI Director Anthony Solomon, former President of the Federal Reserve Bank of New York, launched a series of targeted training seminars bringing bankers together from Eastern Europe and the West to educate the top managers on reforming and operating financial institutions. To better support financial sector reforms, EWI's Warsaw Centre published the International Task Force on Western Assistance to the Transition in the Czech and Slovak Federal Republic, Hungary and Poland, examining the assistance process to date, identifying strengths and weaknesses and making policy recommendations to improve Western aid. The first attention to long-term unemployment came from the EWI Prague Centre's publication Removing the Barriers: Strategies for Assisting the Long-term Unemployed, investigating global best practices relevant to Central Europe.

Since the relative health of the commercial banking sector and capital markets would ultimately determine the development of civil society as a whole, the Institute together with the Harvard Business School faculty fashioned an exhaustive case study of the successes and shortcomings of the Czech economic transformation. Analyzing the policy failures leading to the Czech economic downturn of 1997, the assessments are commonly used by Czech and other regional policy makers in their efforts to determine choice points and consequences in transition economies.