Borrowers are wondering how European monetary union (Emu), if it happens, will affect their credit ratings.

Corporate risk management is advancing dramatically because of computer power, communications, the Internet, and the value-at-risk (VAR) concept borrowed from banks. Several companies are leading the charge, and attempting to quantify risks that aren't just financial. But can that help the treasurer do his job? By David Shirreff.

First there were commemorative watches, then there were commemorative bottles of beer - called Red Dawn. Now the Bank of England has joined the crush to make a buck out of Hong Kong's handover to China by printing special £5 notes.

More evidence of Dresdner Bank's extraordinary preference for the long view comes in an interview given to the Frankfurter Allgemeine Zeitung by the bank's chief executive, Jürgen Sarrazin.

Despite disappointing emerging market performance relative to the US and Europe over the last three years, investors are generally confident about the rest of the year. Euromoney's survey of 33 equity investors, many of whom run dedicated emerging market funds, asked them where they intended to start, stop, increase and decrease investment in the next six months. An overall ranking of each country (see table) was established by subtracting the number planning to decrease from the number of increases and doubling the scores for stops and starts. Predictably, investors found Russia and Brazil attractive, while concern about the property markets of Thailand, Korea, Malaysia and the Philippines dampened enthusiasm for Asia. Egypt and sub-Saharan Africa were popular candidates for new investment. Most investors maintained that risk in emerging markets is compensated for by their prices. Only one among the 33 polled was dissatisfied with recent emerging market performance and planned to decrease overall exposure. "I'm aware of the attractions of emerging markets," he said, "but they're good maybe one in four years. The rest of the time you're ultimately better off with the S&P 500 or the FTSE."

Israel is awash with companies - many in the high-tech sector - eager to make equity and debt issues. Not surprisingly, foreign banks are beginning to establish local bases. The snag for the local capital market is that much of the listing is being done abroad, particularly on Nasdaq. Nick Kochan reports on efforts to bring some of it home.

Borrowers: Borrowers start to play a strategic game

Borrowers: Borrowers start to play a strategic game

The main banks trading in the European government bond markets are looking closely at the mechanisms used to offer government bonds in the primary market.

Coming to a screen near you soon, the all-singing, all-dancing dealing room. Gone are the days when dealers shied away from the prying gaze of television cameras.

At this year's Euromoney borrowers and investors conference, one of the bond market's most respected and outspoken heads of borrowing will be notably absent from the borrower panels and roundtables. Mark Cutis, former treasurer of the EBRD, has jumped back into the banking world, whence he came following stints at Merrill Lynch and Dresdner Bank. After six years at EBRD - he originally committed to stay for just 18 months - he now sits on the management committee of Nomura International, running its international market division.

Borrowers: Borrowers start to play a strategic game

Greek banks will need to consolidate if they are to be competitive in the European single-currency system. Much as their officials dread the prospect, it looks as if the big state-owned banks will also have to privatize to get fighting fit. Privatization in Greece has not been undertaken at break-neck pace, but the second tranche of telecoms company OTE's float will be a big step forward. Philip Eade reports.

It was a twist of fate. In the same month as Jardine Fleming sacked one of its senior executives for being involved in gun-running for rebels in Papua New Guinea, another man with miltary ties was airing his views on the similarities of banking and soldiering in Fleming's monthly research reports.

By all accounts the City of Moscow is in good shape.

April is the cruellest month, wrote TS Eliot. Chinese investors may beg to differ. They found May pretty cruel. In the past month the Beijing authorities have declared war on China's two principal stock markets, rattled by alleged speculation. This had carried the Shanghai domestic share index to gains of 55% since January, and pushed Shenzhen up 75%. By the time Beijing decided to act the two markets were on P/E ratios of nearly 50 times historical earnings. But at first Beijing's usually subtle hints had no impact on a market convinced of its own immortality.

Saudi Arabia's capital markets will require reform and liberalization if the kingdom is to build a dynamic economy on what is left of its oil wealth. The Saudi authorities are as aware of this as outside observers and their own bankers, but have been ultra-cautious about implementing change. Philip Moore reports on signs of a quickening pace.

The use of credit derivatives is set to expand dramatically. Christopher Stoakes explains some of the legal pitfalls.

The European Investment Bank, Euromoney's borrower of the year, is snapping at the World Bank's heels with careful timing and improved investor relations. Russia, best debut borrower, excited the market with its $1 billion and Dm2 billion opening salvos. While the experienced team in Buenos Aires makes Argentina our top emerging market borrower a few lines.

The new UK Labour government has won fans in the City of London by announcing, after only a few weeks in office, a wholesale reform of financial regulation.

Governments in emerging markets have spent $250 billion bailing out banks in the past decade. How can the industrial countries help stop the haemorrhage and any knock-on into their own markets? By imposing worldwide rules for better supervision, building markets and institutions in their own image, or by letting free markets do their work? James Smalhout reports.

Contrary to the pessimists' view, Europe will show economic recovery this year and next. And that will ensure monetary union stays on track for 1999. In core Europe, super-cheap money has been complemented by weak exchange rates. And those easy monetary conditions are likely to win out over Europe's Maastricht fiscal masochism to produce economic recovery.

The job of borrowers today is to do much more than merely borrow. As well as raising new debt, they must think strategically: taking care of whole portfolios of existing liabilities; managing these liabilities against assets; managing duration and currency gaps between assets and liabilities to beat their benchmarks. Only then can they plan their moves in secondary markets or through new issues. It's a complicated and demanding game.

US interest rate rises are an ever-present threat to Latin American bonds, but market bulls reckon such rises won't be as destructive as they were in 1994. Sovereign borrowing is easing, privatization is under way, rating upgrades of some corporates have left more room for lesser names and securitization is taking off. So corporates look likely to capture a much bigger market share. Michael Marray reports

Corporate entertaining has never had it so tough. Wimbledon, one of the highlights of the UK social calendar, is unveiling its rebuilt No 1 Court at this month's grand slam tennis championships. But the dynamic new era threatens to spoil the fun for those who are there to impress clients.

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The scandal at Nomura Securities, the subject of this month's cover story, carries an important lesson for anyone dealing with Japan. Japanese financial institutions have a very different attitude to the law than do their western counterparts. Not to put a finer point on it, they have little moral compunction about breaking the law when it suits them.

Business leaders keep a close eye on rivals in Russia. "If your competitor buys a Mercedes, you'll buy a Mercedes," says Yuri Kotler, spokesman for the Federal Commission for the Securities Market. "If he hires a western chief financial officer, so will you. And if he issues a Eurobond..." Since the Russian Federation's debut $1 billion Eurobond last November, many companies have said they'll follow suit. So far none has. The state Eurobond "had the gestation period of an elephant", as one banker put it (it took nearly a year to launch the deal) so there should be little expectation that Russian companies would be right behind it. And the City of Moscow only managed to launch its $500 million debut Eurobond at the end of May. St Petersburg and Nizhny Novgorod are due to come to market by the end of this month.

Issuer: Porsche International Financing plc

HSBC Holdings has held on to the top spot in this year's rankings, while mergers have propelled Credit Agricole and Wells Fargo up the table. Elsewhere, Japanese banks have fallen while American banks have made a steady climb.