November 2001
| Euromoney November 2001 Heavily influenced by Washington, international financial institutions may be irresistibly drawn in by the US-led coalition's war on terrorism. Their performance was already under scrutiny. Now it's likely they will favour countries that are strategically crucial, paying less heed to their records in economic governance and financial sector reform. Shrinking private capital flows to emerging markets may allow the IMF and World Bank to regain some lost prestige. But if they lend to uncreditworthy coalition partners, private creditors may not follow. - Interview with G-20 chairman Paul Martin
Paul Martin, chairman of the G-20, speaks on the dangers of hosting global economic summits in light of the new wave of terrorism. He also talks about the upcoming conference in Ottawa, trade finance, and the economic side of the war on terrorism.
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Euromoney November 2001
Washington's pressure on banks to crack down on illicit money will impel fearful bankers into still tougher surveillance. To the tangle of checks on money laundering and flows to tax havens must now be added the hunt for often legal money flowing to what are deemed illicit activities. Banks face a huge reputational risk. But the extent to which they can take on policing roles and take initiatives to avert crime remains highly contentious. Neither the technology nor systems exist to make tracing tainted cash straightforward. So is the ultimate answer creating more vigilant, yet less commercial, corporate cultures?
Euromoney November 2001
Unilever is breaking new ground by taking its former fund manager, Mercury, to court in a bid to recover alleged lost earnings. The fund management world is closely watching events as the outcome of the case could have a profound effect on the way that the business operates in the future.
Euromoney November 2001
Leonard Licht and Mercury Asset Management retained an aura of invincibility in the 1980s and '90s. Even after Merrill Lynch bought Mercury, Licht's approach to UK fund management lingers.
Euromoney November 2001
For decades Mediobanca had an unchallenged grip on Italian investment banking. Then the loss of a key deal-maker with unrivalled contacts, followed by the death of its illustrious founder, opened up major deals to foreign rivals and took the shine off its reputation. Yet the wound to it’s pride may not be terminal. With a new generation of bankers, Mediobanca’s name still commands a lot of respect in Milan. Even so, its days of independence may be numbered.
Euromoney November 2001
The mind-set created by the myth of a recession-proof new economy proved a disastrous preparation for the sudden sharp downturn in the world economy. Rattled US corporates have been blaming their poor figures on the American terrorist atrocities. Admittedly certain sectors have been hard hit, but none of them had been in rude health before. Nonetheless the outrages will now be a catalyst for further economic deterioration.
Euromoney November 2001
In a period of uncertainty, Pfandbriefe ought to flourish. Yet the German mortgage bond market is still slow, hit by adverse swap market conditions and credit concerns springing from radical restructuring among the German banks. Even so, rival breeds of covered bonds in France and Spain are doing well. And Ireland aims to create a superior legal framework to put Germany in the shade. Could this rivalry give covered bonds a much-needed shot in the arm?
Euromoney November 2001
A touch too bullish on the bear?
Bankers are selling hard the story of Russia’s return to the Eurobond market with City of Moscow’s latest foray. Yet investors need to be cautious given the republic’s recent debt history. The queue of credible issuers is far from endless and likely to be trimmed by the Russian government as it prepares for its own refinancing in 2002.
Euromoney November 2001
When the world tipped deeper into recession on September 11 it found that Turkey was already there deep down in the hole – a recession veteran. Assisted by the IMF, Turkey has been trying since 1999 to overcome its worst economic crisis since the Second World War. It has had little success. Its support for the US means more funding is likely, but funding alone can’t solve Turkey’s problems.
Euromoney November 2001
Akbank, emerging on top of Turkey's banking crisis, has embarked on a plan to professionalize its management. As it outgrows its family origins, Atbank prepares itself for a joint venture.
Euromoney November 2001
Oyak, the armed forces pension fund, is one of Turkey's largest conglomerates and has joint ventures in multinationals such as Renault, Axa, Elf and Goodyear. But most people do not know of its military origins. Now, Oyak seeks to come into the open, emerging among the top five companies in Turkey.
Euromoney November 2001
Engin Akçakoca, the new director of Turkey's banking regulation and supervision agency, takes on the challenges of reforming the Turkish banking system, which is suffering from a deficiency of capital.
Euromoney November 2001
Within days of the EC unveiling proposed conditions on the merger of SEB and Swedbank, the banks called the marriage off. Had Brussels scuppered a sound deal, or were the fainthearted suitors getting cold feet anyway? The row hinges on the commission’s curious focus on the dominance the new combine would have boasted in its modest domestic market, not the European market as a whole. Critics argue this discriminates against smaller EU states and will curtail cross-border bank mergers.
Euromoney November 2001
By netting more of their transactions internally, the world’s largest banks are transforming customer relationships and process capability into competitiveness and profits. They may take business from exchanges and clearers and it is possible that they are embarking on a course that could reshape Europe’s securities trading infrastructure.
Euromoney November 2001
The terrorist attacks of September 11 posed an unprecedented challenge to banks specializing in global custody. Most of them seemed to cope well enough. But the scale of the disruption has focused attention on the need to develop back-up and recovery systems that can cope with widespread destruction, rather than merely deal with localized IT glitches, and can encompass communications links with peer banks and clients.
Euromoney November 2001
Monitoring thousands of accounts payable and receivable flowing daily through myriad bank accounts, while minimizing short-term borrowing costs and maximizing returns on investment of liquidity, is a huge challenge for corporate treasurers. They value highly banks that do this well. But Euromoney's poll shows few banks excel.
Euromoney November 2001
On October 9 representatives from three of the leading international cash management banks sat down with treasury officials from three leading international corporations to discuss the key issues of the moment: reviewing contingency planning for any future disruption to the payments system, moving onto internet technology and reducing errors in simple payments processes. While the banks feel they must invest heavily in technology to stay in this game, the corporates can’t see why they don’t share these costs and concentrate instead on getting the basic services right.
Euromoney November 2001
The success of Chase’s past merger ventures seemed to bode well for its link-up with JP Morgan. But those deals of the early 1990s had brought together commercial banks and didn’t have to reckon with integrating culturally alien investment bankers. On the execution front, the merger has proved messy, with blood-letting among JP Morganites in New York being matched by Chase losses in Europe. Beyond this – in itself enough to worry shareholders – there are concerns that underperforming JP Morgan was not the ideal medium for Chase’s equity market aspirations and that the deal was ill-timed, damaging Chase’s well-deserved reputation for clever risk-management skills in choppy markets.
Euromoney November 2001
A partial recovery in US equity markets looks promising. However, as bad economic news flows in there’s still uncertainty on the broader question of whether a market bottom has been reached. Bond yield curves suggest a different story to conventional equity wisdom, which implies investors should now be positioning themselves in mid-recession for a market upturn.
Euromoney November 2001
Highly-paid M&A bankers have precious few deals to keep them occupied in the present cautious climate. Advice is taking up much more of their time, as is research to find the likeliest candidates for that elusive business breakthrough. They are also reorganizing to focus on sectors that are not entirely dormant.
Euromoney November 2001
Euromoney November 2001
Euromoney November 2001
Euromoney November 2001
Euromoney November 2001
Euromoney November 2001
In the wake of recent events, bankers and their lawyers need to be much more aware of the need to balance effective legal compliance with a respect for client confidentiality.
Euromoney November 2001
Euromoney November 2001
Euromoney November 2001
Euromoney November 2001
Euromoney November 2001
Euromoney November 2001
Euromoney November 2001
Euromoney November 2001
Euromoney November 2001
Euromoney November 2001
Euromoney November 2001
Euromoney November 2001
Euromoney November 2001
In the wake of recent events, bankers and their lawyers need to be much more aware of the need to balance effective legal compliance with a respect for client confidentiality.
Euromoney November 2001
Deal: Merger of technology platformsStructure: MTS buys 15% stake in CoredealResult: New corporate bond structure – CoredealMTS
Euromoney November 2001
Strategic and commercial manager for treasury services, Reuters