LONDON -- The bank set up to foster Eastern Europe's transition to open-market economics said Wednesday its refocusing has led to more risk being taken in an expanded number of countries.


"We're doing more difficult things in more difficult places," Nick Stern, chief economist of the European Bank for Reconstruction and Development, told a news conference.


"We're moving more into the private sector and taking more risks by doing more equity investment."


The EBRD was restructured by current President Jacques de Larosiere who has just completed one year in office.


The restructuring, which will emphasize the Bank's private-sector role, abolished the distinction between private and public sector banking and introduced country teams of bankers who would liaise closely with an increased force of bankers in the field.


Stern was speaking at a press briefing to launch the EBRD's first Transition Report which details progress in the economic transition in eastern Europe.


Stern said the EBRD would likely commit around 1.8 billion Ecu ($2.29 billion) in loans and investments this year, a similar amount to that seen in 1993.


But he said 1994's record was the greater achievement since the increased presence in the private sector meant smaller projects were being tackled which entailed greater resources on preparation.


In its early days, the EBRD came in for criticism for involving itself in relatively low-risk projects where its own role was questionable.


Its new strategy is seen as getting more to grips with the problem of private-sector development in former communist economies but will inevitably lead to higher provisioning levels and lower profits in the short term.


Senior EBRD officials have admitted that the Bank will probably make a loss this year.