If the systems changeover for the euro turns into chaos, then the proprietor of a greasy spoon café in the City of London might know why.

Another euro-related operational issue has cropped up. Banks have tended not to charge each other for the provision of intra-day liquidity, but the euro payment systems will change all that - at least that's what bankers are predicting.

While all eyes are on the birth of the euro, a region not so long ago written off is quietly rebuilding. In Thailand, interest rates are falling 25 basis points a week. The Republic of Korea looks likely to be upgraded as its current account swings from a 1997 deficit of $8.2 billion to a projected surplus of $40 billion in 1998 - a change equivalent to 16% of GDP. Even in Malaysia - where the situation is complicated by the regulatory environment - the stock market is booming. What they said could not happen is happening. Asia is exporting its way out of trouble.

The euro may cause glitches in some areas of the capital markets, but probably relatively few in swaps or derivatives, thanks to some smart thinking last year, says Christopher Stoakes

On the first working day of January 1999 big institutional investors throughout euroland will wake up to find that they are no longer limited to holding domestic equities. But how do you go about swapping a national stock portfolio for an Emu-wide one? You can't just call your broker and sell half your portfolio. There are derivatives - options on pan-European indices, equity swaps and reverse convertibles - that can provide exposure quickly and simply. Or you can speak to the specialist portfolio traders - the guys who have quietly spent the last couple of years installing computer systems to process huge order volumes.

By the time you read this, the most important development in global finance in 50 years will have taken place. At vast expense to private sector banks and non-financial institutions - who have borne almost the entire burden of a task made unnecessarily difficult by the long-evident inability of Europe's governments to act pragnatically or in concert - the euro has been created. Sceptics are still concerned that the costs will far outweigh the benefits. But the apparent altruism of the private sector should tell them something.

Ukraine is at the cross-roads. Too limited reform has left it on the brink of default, opposition parties demanding a return to central planning. Either the country embraces market economics, and wins IMF support, or it rejects them, and invites economic collapse. Reunion with Russia might then be the only option.

Telecoms companies kept the capital markets afloat during the second half of 1998. They could play a similar role this year. Charles Olivier considers the industry's financing plans for 1999.

The Czech Republic's voucher privatization left old managements in control of companies still owned - now indirectly - by the state. Though not the only reason for the country's transformation from regional leader to laggard, the mishandled sale of state assets weighs heavy on the economy. Will the government get the sale of the big state-owned banks right? Rebecca Bream reports.

So far there's no world-beating example of an internet bank. Euromoney and the Centre for the Study of Financial Innovation (CSFI) decided to fill the gap in three easy stages. First, drafting the structure. Second, launching a virtual retail bank. Third, diversifying into all areas, to build a veritable Merrill Lynch of the ether. That's the theory. Here's what happened at stage one, as reported by David Shirreff.

The key to prospects for world growth in 1999 is Japan. I expect the US economy to slow during the year and the core of Europe to grow by less than 2%. So the OECD as a whole is unlikely to achieve even 1% real growth this year unless Japan picks up.

A strange side-benefit of the Asia crisis: Hong Kong becomes less brash, and the service improves. "I've always preferred living in Hong Kong during a recession," says John Manser, the great taipan of Robert Fleming, from the comfort of his London office.

Don't knock it. Warburg Dillon Read, the investment banking arm of UBS, comes out the clear winner in this January's poll of polls. Its virtue is consistency and coverage world-wide. While the US houses have their strengths at home, not one can consistently outperform WDR in every market. WDR may have benefited from the effects of the merger on poll results. But that doesn't detract from its commanding position in every major category: underwriting, trading and advising. It's only major weakness is mergers and acquisitions. Merrill Lynch, last year's number one, is let down by results in Euro-commercial paper, foreign exchange and risk management. Deutsche Bank continues to rise overall, but its weaknesses are equity research, Asian equity and advisory. Citigroup with its Salomon addition looks good on paper, but its low-scoring departments are Eurobonds, equities, and credit and equity research. Last year's second half shuffled the pack and we look forward to a wildly different pecking order next January. David Shirreff reports.

It has taken almost two decades of reform but the People's Bank of China (PBOC) believes 1999 will at last see it join the ranks of the world's independent central banks. The big revamp, long-awaited and finally announced towards the end of last year, involves replacing the bank's provincial-level structures with nine regional entities which will answer only to Beijing.

Ulrich Gygi is the driving force behind Swiss privatization. He was the chief architect of the Swisscom offering, Europe's biggest initial public offering (IPO) last year, which succeeded when most other deals were being pulled. As head of the Swiss treasury, where he's spent most of his career, Gygi has also had the task of deciding how much gold the central bank can afford to give away to good causes in the aftermath of the Nazi gold controversy. He is thought to have designs on the top job at the central bank.

Prospects for the beleagured Mexican banking sector have improved following an agreement on restructuring that many analysts feel goes beyond expectations

Issuer: Republic of Finland

City thinktank CSFI has been agonizing over whether to bite one of the hands that feeds it. Should it publish a paper by FSA researcher Kevin James which claims that - surprise, surprise - the gullible British public are being ripped off by their fund managers?

Robert Sexton of Salans Hertzfeld & Heilbronn, Paris, explains how debt-equity swaps could help foreign creditors seeking recovery of Russian loans given the precedent of the US junk bond crisis

Many of Bangkok's drivers owned riches beyond their wildest dreams - and never even knew about it. Mercedes, houses and even whole companies were in the names of lowly drivers as nominees for their bosses. As Thai authorities now grapple with the black hole of debt which engulfed the country, recovering the massive loans - many made to friends or relatives - is not proving as easy as hoped.

At the end of December a select group of Euromarket veterans gathered under the shadow of Credit Suisse First Boston's tower at Canary Wharf. There were there to watch Bank of England governor Eddie George unveil a monument to perhaps their most outstanding colleague. Michael von Clemm, former chairman of CSFB and Merrill Lynch Capital Markets died on November 6, 1997 at the age of 62.

John Heimann, chairman of the global financial institutions group at Merrill Lynch and a member of the firm's executive management committee, takes up a new position next month. After 14 years at Merrill he is retiring from Merrill to become chairman of the Financial Stability Institute at the Bank for International Settlements.

Proving that you don't have to be a heartless mercenary to be an investment banker more than 100 staff from the London office of Merrill Lynch last month volunteered to help Crisis, a UK charity, in its Christmas campaign to house London's homeless.

In a period of mega bank mergers, how can smaller players compete? Through unparalleled regional expertise, say Austria's three leading financial institutions. They are carving out a niche as the experts in eastern Europe. Market downturns haven't put them off this approach. Each has a distinct strategy for expansion. But can they live with the big boys? Marcus Walker reports.

Romania will default on its foreign debt without assistance from the IMF and World Bank. This is unlikely to be forthcoming unless a politically induced log jam on economic restructuring and privatization is overcome. At last the government has recognized the crisis. Rebecca Bream reports.

Allianz has a 100-year history of managing insurance assets. Internationalization of capital markets, fierce competition in asset management and the arrival of the euro have prompted the company to set up a third-party investment firm. Is Allianz Asset Management ready for the challenge ahead?

The chiefs at GE Capital Services attribute their success to not behaving like bankers. Their approach ­ moving from financial services into related businesses ­ has amassed assets of $255 billion and contributes 40% of parent GE's income. But driving force Gary Wendt has just retired and along with him goes ­ or so it seems ­ his strategy of growth by acquisitions. Where next for his creation?

When Frank Quattrone left Morgan Stanley in 1996, nearly everyone thought Morgan's technology franchise would go with him. But the Wall Street firm's edge in California wasn't blunted. Quattrone's magic has now faded, and all competitors bar one seem to be floundering. Michelle Celarier reports

Last month the grain floor at the Chicago Board of Trade voted in a chairman after its own heart. To the big banks trading on the Chicago exchanges it looked like another setback for the modernization they crave. It's not just electronic trading that's at issue, but also cooperation - and possibly mergers - between Chicago's three derivatives exchanges that may prove vital to stave off competition.

To open a bank at any time is brave, especially in Russia. To have started trading in 1993 aged 23 while still at university, takes something special. Andrey Melnichenko studied physics at Moscow State University before starting up his own bank with four friends.