Although many governments will keep pushing loose fiscal policies, capital repricing is inevitable ? probably led by the ECB. That lead should favour the euro and European bonds, at least for a while

www.breakingviews.com

Both BNP Paribas and Barclays Capital are beefing up their push into the highly competitive US fixed-income markets by setting up new regional offices there to get closer to key institutional clients. Barclays Capital CEO Bob Diamond opened his bank's new institutional sales office in Boston at the beginning of last month and BNP Paribas set up a fixed-income institutional sales desk in San Francisco at the end of June.

By Camilla Palladino

Despite Baillie Gifford?s lack of corporate activity, the firm has set up several joint ventures. Amin Rajan, CEO at research firm Create, says: "JVs fit well with the structure and it?s a sign of growing confidence."

Merrill Lynch (Bank) Suisse is the largest of Merrill's onshore international businesses, with $11.16 billion assets under management. Regarded as separate from the GPC business, the Swiss bank has been re-establishing links with it over the past two years in a bid to boost business. "While the Swiss bank wasn't making a loss, assets had settled to about $9 billion and stayed there," says Nick Stonestreet, who became CEO of the Swiss bank in July last year. "There were many things that needed addressing, such as service quality, but the most important move in the last year has been a reconnection to Merrill Lynch GPC. Before that we tended to stand alone."

Fund managers are increasingly pessimistic about global growth expectations, inflation is still a concern and only bullishness on Japan bucks the trend, according to Merrill Lynch?s latest research.

www.breakingviews.com

In part two of our structured credit roundtable, participants discuss the new products and strategies available to investors in the structured credit market. These innovations can be complex to analyze and require new infrastructure and skills to manage effectively. But the bottom line is: no-one can afford to ignore this asset class.

The UK's financial regulator will take a dim view of companies that respond in a legalistic way to its investigations, threatening exemplary sanctions against those that don't cooperate fully.

All the international businesses of Merrill Lynch's GPC group made losses in 2000-02 but the Japanese business suffered most. Now, after a restructuring, and a shift in focus towards high-net-worth individuals, the business is back on track and in profit.

New issuance of American depositary receipts is being hit hard at the moment, despite growing demand from investors in the product. JPMorgan research estimates that total ADR capitalization at the end of last year accounted for $650 billion, around 33% of all foreign investment in the US, yet new ADR issues from Europe have virtually dried up. Plentiful issuance from Europe, the Middle East and Africa, which accounted for 60% of supply in 2000 in the era of large-scale transatlantic acquisitions funded through stock such as Vodafone's acquisition of AirTouch and large IPOs is now a thing of the past. Many major European corporates already have a US listing but others are being put off by uncertain equity market conditions and new regulatory burdens with the introduction of the Sarbanes-Oxley Act.

Analyst neglect of UK small-cap and mid-cap stocks subtracts £8 billion ($14.7 billion) from the capitalization of the UK equity market, according to UK research boutique Equity Development. Comparing the valuations of stocks for which there are nil, one, two, or more than three analysts publishing research, Equity Development found discounts for neglect in 75% of the sectors for which there is useable data.

The US Federal Reserve?s upward interest rate move at the end of June came as no great surprise on Wall Street. It might well have been noteworthy for being the first rise in four years but noises about inflationary concerns and US economic growth had already made a 1.25% rate a dead cert. ?The 25 basis points increase had been priced in a month before,? says one Wall Street trader.

The emergence of investable hedge fund indices has provoked a great deal of debate in the hedge fund industry, with extravagant claims being made by both proponents and detractors.

API stands for application programming interface. Sadly for linguistic purists it has become a geekspeak verb; so banks can "API into another bank" or, as one user puts it: "We just API what we need." But API matters. Crudely put, it is a method of allowing programmers to develop additional functionality to boost the capabilities of a given piece of software. It is a way for banks to retain proprietary control over off-the-shelf products, and can mean that a lesser product can rival a more expensive one after the in-house programmers have got their hands on it. Any product worth its salt in the financial technology world (and far beyond - Google, for example, offers API tools) will give its users the opportunity to build on top, thereby combining the best of both buy and build worlds.

Merrill's asset management business, MLIM, is getting back to its retail roots. Originally established in the US to serve the private-client business, MLIM grew, in part by the acquisition of mercury Asset Management in the UK, to become an institutional asset manager. Now, says Bob McCann, vice-chairman of the wealth management group that comprises GPC and MLIM: "We have developed a third-party retail business that is profitable and growing fast."

July's global bond offering from the Hong Kong SAR was the first issue since colonial days and the first ever in US dollars

To integrate or not is the question facing Ukraine?s powerful oligarchs in the last months of president Leonid Kuchma?s 10-years in power.

Ask most Hong Kong bankers frequenting the bars of Lan Kwai Fong about their last brush with anything Czech and most would point to sleepless nights watching the Republic?s flirtation with football greatness at the recent Euro 2004 championships. If local hedge fund manager Richard Johnson has his way, though, that is about to change.

The high-stakes game of poker between jailed businessman Mikhail Khodorkovsky and Russian president Vladimir Putin entered its final round last month after bailiffs seized Yukos?s core production unit and threatened to sell it off at knockdown prices. Bailiffs seized Yukos?s Yuganskneftegaz production subsidiary on July 20 to pay off a $3.4 billion tax bill, relieving Russia?s second-biggest oil company of its main cash cow. The subsidiary accounts for 70% of Yukos?s oil reserves and 60% of production. It has also contributed most of Yukos?s double-digit production growth in recent years.

In every industry, the vast majority of frauds are committed by the defrauded company’s own staff. But nearly 10 years after the collapse of Baring Brothers, banks have been slow to understand how to manage employee risk.

RBC has gone golf mad. As homage to the winner of the Masters Tournament 2003, Canadian-born Mike Weir, RBC Royal Bank has launched a credit card in his name. The RBC Mike Weir Visa Card offers clients golfing-related rewards for points. Cardholders can use their points, for example, towards green fees or receive offers from some of Canada?s top golf courses. RBC Royal has also just announced that cardholders can enter a contest to win a round of golf with Weir himself at his home course of Taboo in Ontario. ?I?m glad to join with RBC in a venture that rewards golf devotees,? says Weir, who is currently on the PGA Tour, but the pressure is on. RBC has promised that cardholders will be awarded extra reward points for every victory Weir clocks up. Cardholders have already nabbed themselves 500 points for Weir?s win at the Nissan Open in February. And if he wins one of the majors or the Bell Canadian Open in September, cardholders will receive a bonus 1,000 points. They will have to cross their fingers, though. Weir tied a mere ninth at the British Open in July. Devoted fans are confident, however, that he?ll do better on home ground in September.

Multi-voiced impressionist Rory Bremner provided the laughs among the backslapping at Euromoney?s Awards for Excellence dinner in London last month.

Wary investors and a growing equity issuance backlog have spelt disappointment for many of the issuers that have made it to market. IPOs have been particularly hard hit, prompting advisers and bookrunners to devise processes that offer more reliable pricing and greater flexibility.

With massive capital, some of the finest minds and cutting-edge technology, the bulge-bracket global securities firms offer clients a seamless one-stop service. Despite their dominance, though, cracks in the securities walls they have built remain to be exploited, as Wellington Securities is proving.

Since Asia's 1997 financial crisis, most Thai financial businesses have been forced to focus on recovery and restructuring. But Asset Plus Securities came through unscathed. Now called Asia Plus Securities, the firm shows what might lie ahead for other Thai financial firms if they can get their houses in order.

www.breakingviews.com

Despite pockets where problems persist, privatization, consolidation, and improved risk management and regulation are bringing widespread advances in emerging market banking systems.

The Prague Stock Exchange, which had been more or less comatose for years, sprang into life thanks to the $211 million IPO from generic drugs maker Zentiva. It was the first IPO on the exchange for a decade.