Argentina was brought down, ultimately, by the miscalculations of its own leaders. But others must share the blame, including the IMF. The international financial community, especially the large sell-side banks, do not come out of the debacle smelling of roses either.

The Enron saga showed vividly how credit rating agencies can be key players in the endgame facing a stricken corporation. That's a disquieting role for the agencies, which present themselves as mere observers. But downgrades, by setting off forced selling, can push troubled companies over the edge. How did investors come to rely so heavily on ratings and what do they intend to do about it?

Introduction of euro notes and coins involves complex decisions on the part of bankers on how to deal with legacy currencies in contracts.

Back in January 1999 the euro was heralded as a strong currency that would soon outshine the dollar. Europe had a surplus on its external balance of payments and tight fiscal policies. The US had a huge current account deficit, net external liabilities and budget deficits. The dollar was bound to dive. How wrong the dollar bears have been.

Poland, Hungary and the Czech Republic are among 10 states, mostly central and eastern European, that Brussels is vowing to admit as soon as 2004. Only Bulgaria and Romania would be kept waiting. But this idea doesn’t please some existing EU members – and a radical view is emerging that what matters is market reform, not EU membership.

Argentine

The past 12 months have been tough for online wholesale finance. Banks are ditching their e-commerce divisions, having finally realized that keeping them separate from the business lines is ridiculous. Some multibank sites have closed. But online analytics have come into their own, transparency is improving and banks generally have a better idea of what the internet can and cannot do. Even so the web is still not fulfilling its potential. Despite all the talk about the net making the markets more open, politics and secrecy are damaging web-based trading. Banks know that they have not found the perfect way to trade online but some of their individual products excel.

For much of last year US equity issues were hard to get away and for a few weeks September 11 closed off IPOs altogether. Now a revival is apparent, though one characterized by caution. It should persist, if optimism about recovery from recession is not unfounded.

With its economy already weakened by falling oil prices, Venezuela’s suffering is being intensified by the actions of president Hugo Chávez, whose populism is rapidly losing all support. More conflict is likely.

The focus of interest in central Asia is returning to strategic and newly oil-rich Kazakhstan where tycoons and reform politicians are vowing to shake up the longest-lasting regime in the post-Soviet constellation. With growth in double figures, foreign investors are watching too.

Walking around mid-town New York in December is always a chore. And the 15-block section of Fifth Avenue south of Central Park is the worst of the lot. Last year was no exception. Despite the creeping economic gloom of the past 15 months, despite the huge personal and economic costs to New York of the attacks on the World Trade Centre in September, there were still hordes of Christmas shoppers crowding the streets.

In Bucharest, the government of former communists has made remarkable strides in pushing through economic reforms including privatization of Banca Agricola and ailing steel company Sidex. It has even made some progress on banking regulation. If sustained, this should help the country catch up with neighbours in attracting foreign direct investment and bring it closer to eventual EU accession.

Unrest in Argentina lent a new urgency to preventing disruptive sovereign debt work-outs. But few experts yet accept IMF first deputy managing director Anne Krueger’s idea for legal protection for sovereign debtors.

Latin America

An overpromoted investment banker who should never have been doing the job in the first place? Or a gifted and articulate, internationally minded manager leading the drive for transparency and shareholder value?

There were celebrations at the Spanish treasury last month. Two days after secretary of state for the economy José Folgado presented Spain's debt issuance plans for 2002 to investors in Madrid, Moody's upgraded it.

Convertibles

Telecoms service providers are still struggling to rebuild their balance sheets and avoid the worst consequences of overpaying for 3G licences but Finland's Nokia, which is hugely exposed to the mobile sector as a builder of mobile networks and seller of mobile phones, seems to be in robust good health.

Collateral

Financial Security

President, Tokyo Mitsubishi Securities

Adrian Nastase, the prime minister of Romania and Social Democratic Party leader, has been described as “a proactive politician”. During a recent trip to the UK, he explained that positive action is his priority.

Despite jitters after the September 11 attacks, tier-one bank capital issues offering better returns than government bonds have continued to remain popular with investors, boosted by attractive new structures.

Oilmen reckon great discoveries are never easy or geographically convenient. The Kashagan oil field offshore Atyrau in the Kazakh waters of the Caspian, arguably the most important find since World War II, certainly fits that bill.

Citibank/SSSB and Deutsche are neck and neck in our annual poll of polls compilation of survey results. Deutsche tops the underwriting table again and jumps ahead of both Goldman and Citibank/SSSB to win the advisory section. Citibank/SSSB wins our new internet and transactions processing tables and beats Deutsche into second place in the trading section. Goldman scores strongly in all categories save transactions processing, and JPMorgan Chase is in the top four in all categories except underwriting.

Issuer: Diversified Global Securities Limited (UBS Principal Finance)Type of deal: Cashflow arbitrage CDO of CDOsAmount: $236.95 millionDate: December 13 2001Underwriter: Société Générale

E-Finance

Russia

There may only be two surviving Beatles, following the death of George Harrison, but their influence continues to stretch throughout the world, even into financial services.

The citizens of Hamilton, Bermuda, are well used to seeing expensively dressed business executives drifting in and out of their gleaming glass and metal towers. But they may not be aware that their small island in the mid-north Atlantic - 22 square miles in size with a population of just 65,000 people - is increasingly viewed as the capital of the global insurance industry. How has this happened?