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October 2001

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  • Axion4gstp, established in March 2000 to develop the global straight-through processing initiative, is now in its pilot testing phase.
  • The days of professional footballers retiring from the sport to run a pub are well and truly gone. The riches bestowed on the game's top stars have done more than just bump up their bank balances. If the latest move by Alan Shearer is anything to go by, their new-found wealth is encouraging them to take an interest in investment strategy.
  • The continuing success of the bank now known as Santander Central Hispano in growing profit, forging alliances elsewhere in Europe and taking major market shares in Latin America is a tribute to the skills of the two banks that came together to form it. But behind this public face the marriage of two distinct banking cultures has not come easy.
  • The Caspian region has begun to boom because of its oil potential. Now the aftermath of the terrorist attacks on the US will transform the politics of the region. Bad news for the Afghans could in the long-run be good news for the countries around the Caspian if it gives them more bargaining power.
  • Belarus's small banking system has remained a sideshow during the tumult of recent years, while some of the most advanced of Europe's transitional economies suffer.
  • Universal banks are making great strides in winning business that used to be the preserve of the investment banks. In part a function of the weak state of the financial markets, it may also be a secular trend. A big balance sheet is a mighty weapon and investment banks will be particularly pressed if they are forced to indulge in competitive lending to retain customers. Yet the investment banks’ prospects have been blighted as much by their own mistakes, such as ineptly timed waves of sackings of key personnel after losses, as by irresistible new forces.
  • The response of private-sector financial institutions, central banks, regulators and governments to the murderous attacks on New York and Washington has been one of remarkable resilience and impressive solidarity. Governments have forged their diplomatic coalition against terrorists, central banks have coordinated injections of liquidity and interest rate cuts to prevent systemic crisis, regulators have been flexible enough to relax - temporarily - certain capital standards, banks have lent each other space and carefully rebooted the financial markets.
  • With Pakistan once again becoming a frontline state, the financial community is preparing for the worst. Despite this, Pakistan's move to support the US has brought comfort to the market.
  • Although deeper and more liquid than anyone had dared predict, the nascent euro-denominated bond market in 1999 had one weakness: it was failing to secure may US issuers. However, during the first eight months of this year the costs of issuing in euros narrowed for a great many US borrowers, and increasing numbers of them began to recognize the attraction of the euro market.
  • Global finance is in the front line of the campaign against terrorism. The markets have so far proved resilient, thanks to a massive injection of liquidity by central banks and a brief interlude when a spirit of cooperation broke out among Wall Street rivals. Shoring up global confidence and leaning on international banks to line up for an economic war to starve terrorists of funds are now Washington's financial priorities. Broker-dealers made hay in the flurry of securities selling. But nothing can disguise the fact that the world economy and investment banking were in a parlous state even before September 11. The fog that surrounds the political and military outcome has added new uncertainty to recovery prospects.
  • Jersey City used to be good for three things: it was a good place to park the car before getting on the ferry to New York, it served as the butt of many a poor joke by Manhattanites, and offered a fantastic view of the skyline across the Hudson. The terrorist attacks on the World Trade Centre destroyed the latter, at least for the time being. Though not the prettiest buildings to many, for 25 years the twin towers dominated and defined Manhattan. They were usually the first buildings you would see as you neared the island, and also served as a useful reference point if you got lost when walking downtown.
  • Whether it’s labelled programme trading or portfolio trading, the provision of cut-rate execution for liquid securities is a cash cow for banks and brokers. Despite low margins and dismal prevailing market conditions, institutions are still piling into the business. Just how high can an essentially commoditized service rise?
  • "For every complicated problem," the American journalist HL Mencken wrote, "there is a solution that is short, simple - and wrong." The foreign exchange market's view of the much-mocked, formerly dismissed but now resurrected Tobin tax follows the Mencken line. The idea of a tax on foreign exchange transactions is misconceived, most commentators and market participants agree.
  • In times of crisis, maintaining stability is crucial. Not at Merrill Lynch, it seems. Two weeks after the attacks on the World Trade Centre which forced Merrill to evacuate its headquarters for the foreseeable future, the new regime has seen fit to dispose of Jeff Peek, president of Merrill Lynch Investment Managers.
  • Russia has been trying to climb out of economic isolation for the last two years. Now that economic isolation will act as a shield from recession caused by America's war in Russia's own backyard.
  • Salomon Smith Barney moves back to lower Manhattan. Will other investment banking firms follow?
  • Lehman Brothers escaped across the river, its emergency relocation plan kicking in within minutes of the tragedy. Merrill did not fare quite as well.
  • Author: Kala Rao
  • Normally in the aftermath of disasters it is not long before jokes start doing the rounds.
  • Two weeks after September 11, the sell-off in the Asian equity markets was unabated. Hong Kong’s Hang Seng was down 10.9%, Korea had dropped 10.8%, and Singapore had plunged 18.1%. And Japan’s Nikkei fell through the psychological 10,000 barrier. Chris Cockerill reports on what comes next
  • In the August edition of Euromoney the Emerging Markets table of banks ranked by shareholders equity gave incorrect figures for total assets and asset growth for the Shanghai Pudong Development bank. The correct figures are $15,569 million and 28.67% respectively.
  • The new era of a diminishing treasury debt has been shattered with the events of September 11. Now, the US government appears to be preparing for a vast expansion of public spending, heavily affecting dollar-denominated debt markets.
  • While it has become clear that the combination of an investment bank and a commercial bank works, it may be a long and hard journey for Citigroup to achieve across-the-board success.
  • Rising competition in the programme trading arena has begun to change the balance between agency trading and risk trading. Agency business still controls a higher percentage, but risk trading has begun to rise.
  • Vodafone announces its plans to take control of Japan Telecom, Japan's third-largest telecom operator.
  • The smoke clears around BSCH, and Emilio Botin emerges in front after his swift and successful coup de grace.
  • The need for timely and accurate corporate reporting is a universal concern, but there is no globally consistent evaluation of the levels of disclosure. Recognizing this gap, Standard & Poor’s has conducted a survey of 1,600 companies worldwide to complement its corporate governance scores. In this first release, over 350 liquid and large Latin American and Asian companies taken from the Standard & Poor’s/IFCI Index are analyzed
  • The autocratic president of Belarus, Alexander Lukashenka, was re-elected with a big majority last month on a vague platform of economic liberalization. But few expect a wave of privatization or reform. Since the collapse of the USSR a decade ago, Belarus has forged a bizarre model of economic management that defies conventional categorization. Part Soviet-style command economy, part crony capitalism, the system has given a few years of relative prosperity. Now though, amid claims that opponents have been assassinated and signs that the economy is crumbling, Lukashenka faces a reckoning. Erik D’Amato assesses the prospects for a country that will be an immediate neighbour to the EU when Poland accedes to the economic community
  • Alrosa is by far the biggest gem diamond producer in Russia and supplies about 20% of world production. Now it is seeking new funding to develop its existing mines, open up new prospects in Russia and Africa, and expand the production of cut diamonds.
  • The 31 states of Mexico are bonding again. But unlike independence in 1821 this time it is purely financial.
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