The players in the financial sectors such as banks face multifaceted forces of risk that callsrnfor decision makers who tend to take risks while ensuring proper risk management. Althoughrnthere is a need for proper risk taking behavior in the Ethiopian banking industry, there is arnblurred picture of decision makers ' behavior in this regard. Whether the risk taking behaviorrnof the existing managers in the Ethiopian Banking industry is risk aversive, risk neutral orrnrisk prone, it is kept unnoticed since no research has been made in the area. Besides, whetherrnsuch behavior varies with individual decisions, private based settings or government basedrnsettings is one of the central inquiries of this research. To unfold this, the analysis is madernbased on mail survey method with two sets of questionnaires administered and distributed torna sum of eighty respondents of Commercial Bank of Ethiopia and of Bank of Abyssinia. Thernmeasurement involved various cross checking mechanisms including the use of preferencerntheory of Hammond (1967) and decision analysis. With this procedure, the study arrived at arnconclusive result that attitude towards risk is context bounded. That is risk taking behaviorrnimproves when the decision maker progressively moves from personal to organizationalrndecision, from individual to group decision, and from government establishment to privaternestablishment in the cases under investigation. The attributed causes to such behaviorrninclude personal fear of decision makers, measures taken by owners and the board ofrndirectors, the nature of the organization and the imbalance between reward and penalty.rnBesides, the impact of such behavior on overall organizational performance was alsorninvestigated.