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May 1997

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  • Bob Rubin could be the next president of the United States - and within a matter of months.
  • Almost no-one outside Japan has noticed, but an unprecedented wave of mergers in the financial sector is about to hit the headlines.
  • If you're still not ready for monetary union, Deutsche Bank might just have the answer.
  • Even in the age-conscious Euromarket where the best and the brightest, like policemen, seem to get younger, Bill Winters is a classic example of a fast-track career. Still only 35, he runs all of JP Morgan's fixed-income activities in Europe. Given Morgan's surge in primary underwriting and inherent strengths in swaps and derivatives, this makes him one of the most important individuals in the Euromarket. "Bill Winters' position is not dissimilar to Jimmy Forese at Salomon Brothers in London but Bill carries the Morgan calling card which gives him a definite advantage," comments a former Salomon managing director.
  • JP Morgan won plaudits for altruism when it donated RiskMetrics, a market volatility matrix, to the financial world in 1994. RiskMetrics also proved a superb way of marketing the Morgan name. Now JPM is at it again with a release of CreditMetrics for global consumption.
  • "It's turned out to be what we think is a perfect balance of our cultures and backgrounds - both China and Scotland," says Ian Wilson, Standard Chartered's general manager for Hong Kong, China and north-east Asia.
  • If Arab states are to build industrialized trading economies on their oil wealth they will need internationally accessible capital markets trading a full range of financial instruments. Without these, Arab funds abroad - let alone foreign capital - are unlikely to flow in. Nigel Dudley reports.
  • The foreign exchange business is entering a period of rapid change. The lack of volatility in the market over the past 12 months has forced the big commercial banks, which have long dominated the business, to close offices and cut staff. In their place, our annual poll reveals, investment banks are winning a larger share of the business. The biggest surprise: Merrill Lynch, which jumps into the top 10 at number three. Antony Currie explains why.
  • Officials from Brazil's national treasury are travelling nationwide singing the praises of federal domestic debt to pension fund managers. Later roadshows will sell the same story to insurance companies. They are stressing increased transparency, lower risk, higher earnings potential and a longer yield curve.
  • Two new European-currency corporate high-yield bonds appeared last month, opening what could soon become a thriving sector of the international bond markets. The welcome which supposedly credit-risk-averse European bond investors gave to the two deals was quite spectacular.
  • Are banks facing a rough ride on the information superhighway?
  • Revolutionary changes are afoot in South Korea. Spurred on by recent scandals, it is poised to scrap state control of the economy and introduce a true free market. But foreigners still find it tough. Maggie Ford reports.
  • Apart from some well-publicized swap operations that may have turned sour, Belgium's treasury has reduced the kingdom's cost of borrowing dramatically. But, as Charles Piggott reports, potential losses on contracts signed in the early 1990s have raised important questions for all sovereigns trying to balance market confidentiality with public accountability.
  • News of a planned merger between Bankers Trust and broker Alex Brown came in a rush. In fact, though, the firms had long recognized their complementarities and had first started talking about a link-up in 1993. Peter Lee reports.
  • The hard lessons of recession mean that debt financing is going out of style in Finland, where an invigorated stock market and a brace of privatizations offer a boost for equities. William Essex reports.
  • The niceties of custody hardly apply in emerging markets. Clients care more about settling on time than they do about sophisticated services. Banks concentrate on the basics and the breakdown of the market into customer groups is a long way off. James Featherstone reports on the latest developments in Latin America.
  • Hillboot Intergalactic PLC,
  • Issuer: Household International
  • The pressures of qualifying for Emu are forcing governments to privatize faster than they might otherwise think prudent. There's a convergence of issues as well as a convergence of currencies. Is it all more than the market can bear? Catherine Garner reports.
  • Banks are constantly exploring new and cheaper ways of raising and using capital. After Tier 1 (shareholders' funds) and Tier 2 (debt capital) comes Tier 3 to support short-term trading positions. But only the adventurous Dutch have put Tier 3 to use. There seems to be more mileage in clever structures such as callable perpetuals. Jules Stewart reports.
  • Bankers like to wring their hands every time a competitor is forced to report a big loss caused by a rogue trader or poor controls.
  • With civil war and political manoeuvring giving way to economic reconstruction, Bosnia and Herzegovina is facing up to the need to attract foreign investment and trade finance. An innovative World Bank political risks guarantee facility announced in March should prove a useful element in this process.
  • A change in the way US treasuries can be settled promises to inject liquidity into repo markets denominated in illiquid currencies or in markets that lack repo. It also has ramifications for the holding of US treasuries as reserve assets. By Christopher Stoakes
  • The world is all perversity. The worst that could happen to investors is stronger global growth, producing weak financial markets. That will happen if Japan picks up this year at the same time as core Europe, and there is a continued boom in the US.
  • Rarely has a deal triggered such animosity: joint lead managers who couldn't bear the bookrunner; unreturned telephone calls; alleged breaches of a gentleman's agreement. That's if you believe the members of the syndicate. But if you believe the bookrunner, the other banks are "squawking" in their own dream world. Amid such squabbling, the $1 billion debut by the central bank of the Philippines had to be pulled at the last moment - leaving behind recriminations that will sour the Asian capital markets for years. Steven Irvine reports.
  • Issuer: Republic of Ecuador
  • Wall Street is competing with an 800-pound gorilla. That's the label attached to Chase as it wrestles investment banking mandates from traditional players. Even by US standards Chase is noted for being aggressive. And its great strength is the lending capability that helps it win both bond and M&A deals. Will it eventually be king? By Michelle Celarier.
  • The development of Chile's domestic securitization market is gathering pace, with half a dozen transactions in the pipeline following the groundbreaking deal launched in January by Transa Securitizadora. As Euromoney went to press, Transa was about to launch a second offering, consisting of $9.7 million of notes backed by mortgage loans.
  • Yet another trading scandal came very close to rocking a major financial institution in the City of London recently. This time it was Bankers Trust which had a nasty shock when it discovered that blatant rogue trading was going on in its midst. The perpetrators this time were children from a London secondary school attending a Bankers Trust maths weekend at the University of Warwick.