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March 1998

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  • Move over Bob Dylan, here comes Got Jakapun and his own brand of social comment, Thai style.
  • The Euromoney that never was. To salute the departure of editor Garry Evans after eight years' gallant service the magazine produced a special version of its monthly cover, a real collector's item. This is Evans in his triumphant role as Alberto Schultz, the Leeson-style villain of a simulated bank crash, the Fall of Mulhouse Brand, performed last August. Evans is now a market strategist at HSBC Securities in Tokyo, researching the very stocks whose demon behaviour triggered Leeson's downfall. His fluent Japanese and skilful editorship through the volatile 1990s should prepare him for anything the Nikkei can throw at him. But will he now be able to get to closer grips with that much-needed reform of Japanese finance, which he called for so often in his editorials?
  • Less than a year ago a damaging scandal over payments to Japanese gangsters by senior officials at Nomura Securities suddenly propelled a little-known and comparatively young executive, Junichi Ujiie, to the office of president and chief executive. There he took on the task of stamping out corruption and modernizing management at Japan's largest securities firm.
  • Blue Flag, the regulatory database developed by Linklaters, is the benchmark by which all capital-markets law firms should be judged, says Christopher Stoakes.
  • Canadian bank CIBC has built up a good track record in the US since developing an investment-banking strategy in the early 1990s. Now it's consolidating its position south of the 49th parallel by merging with New York firm Oppenheimer. Michelle Celarier reports.
  • Nothing is ever quite what it seems in Thailand, as ING Bank learnt the hard way recently. A main board director flew from Amsterdam late last year to have lunch, shake hands and return smiles with executives at Thailand's eighth-largest bank, Siam City Bank (SCIB). A memorandum of understanding (MOU) was signed under which ING would buy a 10% stake in the Thai-listed bank for Bt1.32 billion ($30 million) as part of a recapitalization.
  • Takumi Shibata has long been considered among the most brilliant of Nomura's rising stars. "He's without doubt one of the most able at the bank," says one British banker who has known him since 1988. "Analytical, decisive, and absolutely the right man considering Nomura's strategy of giving the international business such a large sway within the firm."
  • Following a Dutch World Cup soccer victory against Germany in 2002 the Dutch are emboldened to walk out of European economic and monetary union.
  • Until recently, the name of Nomura, Japan's largest investment house, did not mean much to the general public in Bulgaria. Recently, however, the Bulgarian media have been eager to find out more about Nomura as its European executives were due in town, intending to acquire one of the the country's best banks.
  • It's been a period for emotional farewells recently. As investment banks merge, sell or close down, several familiar names have disappeared for good. Over the past few months we have said goodbye to BZW, NatWest Markets and Peregrine.
  • Journalists are a pretty useless bunch who drink too much and should be kept at arm's length. That's a view many people in the markets openly or secretly harbour. Not Dresdner RCM Global Investors.
  • With the merger of SBC and UBS and the sudden exit of both BZW and NatWest from the equities business, one might expect the sinking fees on new international equity issues to be thrown a life-line. Less competition should mean wider margins with fees on international equity deals coming to resemble those in the US, where a lead underwriter can expect 7% for an IPO, down to 3% to 4% for a secondary offer for a large, well-known stock. So, is there any sign of fees rising yet?
  • Choppy markets have brought large, liquid issues from highly rated credits to the fore. With sovereign borrowing down, supranationals are taking their place. In this environment, getting investors interested in smaller corporate issues is tough. Rebecca Bream reports.
  • Last December, Korea staved off default by a whisker. As the rest of the world dithered, the US banks came up with a rescue plan. It bought time while two heroes emerged to hammer out a deal: Citibank's debt-crisis veteran Bill Rhodes and Mark Walker, one of the toughest lawyers in the business, acting for Korea. The battle was all about bank relationships and the double-edged sword of market forces. Peter Lee reports.
  • A ruling by a court in Denver, Colorado, threatened to frustrate all the Wharf group's dealings with US banks. US firms may be entitled to seek redress from their own courts - even if the dispute is on the other side of the globe - but to Hong Kongers this seems like US imperialism. Steven Irvine reports.
  • Do countries learn by their mistakes? Latin America has made many but this time it got things right. Prompt government action has contained volatility so far. Economists have been studying the winning policies. But can these lessons be taught or must they be gained from experience? Brian Caplen reports.
  • Boothill Superhuman Resources (incorporating the Executive Exchange),
  • Issuers: Credit-arbitrage vehicles
  • Deal: Trade sale
  • It would be comforting to portray the intense and speedy negotiations by which international commercial banks and Korean government officials staved off a default in that country as the turning point in the Asian crisis [see cover story, this issue: Korea stares into the abyss]. Indeed, there was much to note and praise in that effort, not least the way in which certain of the largest American banks lived up to the best traditions of leadership in such debt crises.
  • Despite the current signs of relief in Japanese and other Asian financial markets, deflationary forces in the region are set to grow. That will force the US and Japan to signal the end of the Asian crisis with a new global policy framework and massive fiscal stimulus in Japan. Investors should prepare for a policy reversal.
  • Banks like lending money to cement relationships. With a credit derivative they can get the loan off balance sheet and lend some more. Where's the catch? The market for these products is still in its infancy, although there are pockets of liquidity. And payout practice and definitions of default need standardizing. But the market is revolutionizing the way banks handle credit and their balance sheets. Theodore Kim reports.
  • Hong Kong's premier sporting event, the Rugby Sevens, solved its sponsorship quandary last month. Credit Suisse First Boston has taken over the role from the now bankrupt Peregrine.
  • What more proof could there be that banking stays in the blood? After a five-year stint as chairman of the UK's Securities & Investments Board (SIB), Sir Andrew Large is returning to the coal face by becoming Sir Peter Middleton's replacement as deputy chairman at Barclays.
  • Frankfurt's capital markets brokers have endured a constant squeeze on their commissions. And banks don't like them trying to swell their income by adding advisory services or touting downstream for clients. But the fierce competition leaves them with little alternative. A few of them have decided it's do or die, but tact is needed. Laura Covill reports.
  • Ask Michael Byungju Kim about his formative experience as an investment banker and his mind jumps back to New York almost 12 years ago. He had just joined Goldman Sachs out of college and was watching while a senior partner flicked through his pitchbook. "The partner had red braces, a guy at his feet shining his shoes, and was talking to a client on the phone. Meanwhile he was making red marks all over my pitch and punching holes in my analysis and finding holes in my argument," recalls Kim.
  • With markets so volatile, how is Caspian Securities, the world's only investment bank dedicated solely to emerging markets, coping with the situation? Fine, according to its founder and chief, Christopher Heath. But others are less sure, especially in the wake of Peregrine's fall.
  • Swashbuckling Swiss Bank Corp is plundering Union Bank of Switzerland as if it were a captured Spanish galleon. But is it taking the right people? And has UBS got something to teach the number-crunchers about relationship banking? David Shirreff reports.
  • Travel narrows the mind, say the cynics. Andreas von Buddenbrock, who is not the least bit cynical, is inclined to agree.
  • Japan's public are howling for more blood as scandal after scandal rocks Tokyo's bureaucratic elite. Practices silently condoned for years have hit the headlines. The biggest loser is the once-mighty ministry of finance which may no longer call the shots on fiscal and monetary policy, or parachute its old boys into bank chairmanships. Andrew Horvat reports