Mexico's recent elections proved beyond a shadow of doubt that the country is headed toward democracy - an outcome welcomed by investors even though the new political environment raises doubts about the direction of economic policy.

As the tobacco industry and the US government inched towards finalizing their historic $368.5 billion settlement on tobacco-related health claims, the news for the powerful industry was none too good. President Bill Clinton criticized the deal for undercutting the Food & Drug Administration's regulatory authority over tobacco. Joe Camel, the cartoon character that became a symbol of teenage nicotine addiction in the US, was relegated to marketing history by maker RJ Reynolds. And there was growing congressional criticism of the settlement's proposal to make the payments tax-deductible, which the White House said would rip a hole in the federal budget. Any deal must ultimately be approved by congress, and signed by the president, which is not expected until next year.

The competition in Asia from US investment banks has led to new approaches and ideas in equity research. But the old problems remain. Corporate sensitivity makes most analysts reluctant to stick their necks out. And the increased competition has led to star analysts moving to whichever firm will pay them most. Robert Minto reports.

It's always helpful to find a scapegoat when things go wrong. Scapegoat hunters in Thailand think they have found one - or rather two. A pair of ceremonial wooden elephants were installed outside the ministry of finance, only a few weeks before the country was rocked by the resignation of two finance ministers and the collapse of the baht. Coincidence? Not according to those who remember that they used to be there, until they were removed in 1990 because of their allegedly inauspicious influence. Can we expect more violence to the baht until whoever put them there has the good sense to remove them? RM

So much attention is being paid to reforming America's strict banking laws these days that few seem to spare a thought for the committees at the House of Representatives which have to decide on the issue.

Why tinker with international currency speculation by throwing sand in its wheels, when you can block its path completely with a big boulder? That's the view of Paul Davidson, professor of political economy at the University of Tennessee. A 1% round-trip Tobin tax (after Nobel laureate James Tobin) discourages only the small-time short-term speculators. It needs a radical overhaul of the relationship between currencies and economies to end damaging medium-term attacks, Davidson says.

The recent news that Cherokee, an entertainment company, was listing on Ofex - which stands for off-exchange - was greeted in the City of London with smirks and raised eyebrows.

Following recent devaluations in the Philippines peso, Thai baht, Czech koruna and, latest, the Indonesian rupiah, international bond investors are asking themselves, where next? A report by Deutsche Morgan Grenfell points to the mounting pressure on such currencies as the Malaysian ringgit, Brazilian real and Greek drachma.

In their quest for a broader investor base, Pfandbrief issuers are venturing out of the Deutschmark. Some deals did well, some not so well. And the cost is high. But diversification is the key in the run-up to the euro. By Antony Currie.

Aside from the odd foray into the yen market, Fannie Mae has always been a devout US dollar issuer. But, since the start of 1997, something has changed. Of the 11 international bonds the US agency has issued this year, only three have been in its home currency. Does this signal a definite shift in Fannie Mae's borrowing strategy?

SBS-Agro: $250 million, three-year maturity

There have been so many bank acquisitions in the US in the past few weeks it is tempting to think that the financial mergers & acquisition boom must now be over. Simply, it seems there are few suitable banks or investment banks left to buy. In truth, the acquisition wave has only just begun.

Why does Chase Manhattan Bank's television commercial feature Manchester United slotting goals into the net to a Cantonese commentary? The footage appears courtesy of the biggest football match in Hong Kong this year, which Chase sponsored and made possible - the clash between English champions Manchester United, and the top Hong Kong side South China. Chase is believed to have spent HK$10 million ($1.3 million) to persuade Manchester's "red devils" to come to post-handover Hong Kong.

In Euromoney's annual ranking of non-US fund managers, in cooperation with Intersec Research Corporation, the dominant position of the Japanese and Swiss giants is threatened only by further exchange rate movements, and perhaps AXA of France. The global consolidation continues. By Jim Sirius.

It's been a year of upheaval for banks in emerging markets. Thailand, Korea and Mexico have been particularly badly affected. The biggest losers in our ranking were public-sector banks. By Robin Monro-Davies, managing director of IBCA.

Issuer: City of Stockholm

It's tempting for investment banks to promote themselves as "one-stop shops", offering every kind of financial expertise, including lending. It may be good for their client relationships, but it probably doesn't earn them any money. By Laura Covill.

Federal Reserve Bank of New York,

Whether we like it or not, whether it arrives on time or not at all, the euro is already a factor in financial markets. Laws have been made about it, and adapted to it. Government, companies and banks are spending millions, to be prepared for the Big Bang on January 4 1999. That preparation requires rigorous practicality and fantasy, because none of this has been seen before, let alone road-tested. Euromoney here makes a leap of foresight and fantasy. We asked writers and experts from all areas of the market to explore the issues as they see them - the dangers, the unresolved snags, the legal wrangles and the risks that all institutions are being forced to take. The intention is to offer an unbiased collection of the very latest ideas, remembering that the euro is a moving target.

Banks are so desperate to hire high-calibre staff that in recent rounds of recruiting it was MBA students who were asking the questions before they decided on an employer. But the most fluid job market in more than a decade carries its own pitfalls for graduates - it's easier to land up in the wrong job and the wrong firm. Charles Piggott advises on how to stay on track

Nick Leeson, the man behind the Barings disaster, is still attracting controversy despite his sojourn at Tanah Merah jail, Singapore. Two rival films on the bank's downfall are set to hit the public some time in 1998, one a BBC drama, the other a feature film based on Leeson's book, Rogue Trader.

"We don't like the word 'war', we prefer to call it 'competition'," says Jörg Franke, board member of Deutsche Börse, the holding company for the German futures exchange (Deutsche Terminbörse - DTB). He's referring to a belligerent comment back in March by Liffe chairman Daniel Hodson about the rivalry between the London financial futures exchange and its German counterpart.

Austria's futures and options exchange has stolen a march on its larger international competitors with a booming trade in eastern European equity derivatives. Hopes are high for the latest offering, a Polish index product. By TJ Kim.

In a year when the Dow and the S&P are both up more than 24% by mid-July and the Nasdaq Composite rose 31% in the second quarter alone, it's not difficult for a US fund manager to post impressive returns.

Next time your lawyer puts the deal on hold, refrain from calling him uncommercial. By Christopher Stoakes.

When the European Central Bank takes control of monetary policy, what's left for the mighty Bundesbank? And how mighty is it? Its scrap with Bonn over the revaluation of its assets suggests that the central bank tends to back down under pressure. Laura Covill reports.

Issuer: State of New Jersey

The fun has begun. Bayerische Vereinsbank and Bayerische Hypobank announced a "merger of equals" on July 21. They broke the log jam that has been stalling jumbo deals in Germany. The speculation that Allianz might push Dresdner Bank and Hypobank together is over, at least for the time being. The focus now is on a possible fusion of the two Frankfurt giants, Dresdner and Commerzbank, although much depends on the personal chemistry at the top.

The deal was so full of firsts that the borrower's name could not have been more appropriate. It was the first time the IFC had set up a US commercial paper programme for a client, the first private Thai company to tap that market and the first time IFC had syndicated a letter of credit. Capping that, the deal was the largest financing it had ever arranged for a financial institution, the World Bank's commercial arm trumpeted in March 1995.

How important to SBC Warburg is the bank's chief operating officer, the young and mysterious David Solo? Some insiders at the bank say it is the shy Solo who, at 32, is masterminding SBC Warburg's strategy to become the world's best investment bank.

A potential powerhouse player entered Moscow's brokerage market with the creation last month of Brunswick Warburg, a 50:50 joint venture between SBC Warburg and Brunswick Investment, one of the country's leading independent brokers. The venture could be the first of many, with JP Morgan, Morgan Stanley and Merrill Lynch all expected soon to develop Russian operations. Indeed, the changing nature of the Russian market has led some to speculate that no small, independent Russian broker will survive until the end of the decade unless it forms an alliance with a deep-pocketed foreign partner. Moscow has been described as one of the most over-brokered cities in the world, with more than 200 licensed firms chasing a reported daily equity turnover of less than $100 million.

"I hate fancy-dress parties," says Henry Strutt, the 43-year-old chairman and chief executive of Jardine Fleming. "But I'm made to go by my wife. When I get there I usually have a good time." He was most recently seen partying in a 1960s hippy outfit, complete with false beard and strapped-on padded stomach. Fellow partygoers thought he looked like Benny Hill, a British slapstick comedian.