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Over the past few months, banks' capital-raising capabilities have been tested to the limit. Last year, buoyant debt markets compensated for comatose equities. But in 2002 shocks from such collapses as Enron and WorldCom have soured sentiment in credit markets as well. At the same time M&A-related finance from such sectors as telecoms has dried up, as dangerously leveraged operators find themselves shut out of the market. Risk management has assumed a central place in the services that clients are demanding. Investors want to limit their losses, while corporates have to control the dangerous exposures that have become apparent this year. Alastair Borthwick, head of the portfolio credit business at Goldman Sachs, says: "You don't even need to have owned an Enron or a WorldCom - the fact that they have collapsed very rapidly changes the relative importance of credit risk management. Everyone's far more interested...
