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October 2001

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  • Having bailed out loss-making companies, Japanese banks are bereft of capital. Their losses will become even more glaring now that they have to implement mark-to-market rules. And though the latest Nikkei slump was prompted by the attacks on the US, the adjustment is widely seen as fully justified. Selling out to foreign predators is one way out for ailing Japanese corporates but few buyers will be willing to pounce until targets are on their knees. Vodafone’s move to capture Japan Telecom has proved an interesting exception.
  • I am convinced that the outcome of the human tragedy of September 11 will be a gutsy renewal of solidarity and confidence, recently lacking in the US, on the part of Americans and foreigners.
  • In the Netherlands, bankers anticipate that the final stage of the introduction of the euro will pass into history without a hitch.
  • Salomon Smith Barney moves back to lower Manhattan. Will other investment banking firms follow?
  • Vodafone announces its plans to take control of Japan Telecom, Japan's third-largest telecom operator.
  • 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.
  • 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.
  • When markets were at dizzy heights and volumes were burgeoning the rapid implementation of straight-through processing looked to be a necessity. Now, though, developers and potential customers are taking a more sober view, not least because some markets don’t yet seem ready for T+1 settlement.
  • 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.
  • Author: Kala Rao
  • 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?
  • 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.
  • 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.
  • 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.
  • At the IMF meeting in Prague last year, the car carrying JP Morgan chairman Sandy Warner and the bank's president and CEO, Bill Harrison, got caught in the crossfire of anti-globalization protesters. The driver managed to get out of trouble and both men escaped unscathed. But JP Morgan employees joked that, had Warner and Harrison really been in a tight spot, security would have been briefed about who to cover first. Just 10 months after Chase's merger with JPMorgan it was clear that Harrison was firmly in the driving seat.
  • 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.
  • UK proposals on the reform of insolvency procedures take account of the special needs of securitizations. There is, though, uncertainty that all types of such deals are covered.
  • 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.
  • 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.
  • 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 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.
  • "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.
  • Normally in the aftermath of disasters it is not long before jokes start doing the rounds.
  • 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.
  • Lehman Brothers escaped across the river, its emergency relocation plan kicking in within minutes of the tragedy. Merrill did not fare quite as well.
  • Despite huge uncertainty about the political and economic future of the Middle East, bankers there say they are still busy and that life is carrying on as normal.
  • The smoke clears around BSCH, and Emilio Botin emerges in front after his swift and successful coup de grace.
  • 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.
  • The 31 states of Mexico are bonding again. But unlike independence in 1821 this time it is purely financial.
  • Axion4gstp, established in March 2000 to develop the global straight-through processing initiative, is now in its pilot testing phase.