Russia's nascent corporate bond market has been stunted by illiquidity, high yields, short maturities, punitive taxation, early put options and the lack of a properly functioning banking sector. And it is about to face its greatest test.

It is one of the most alluring sights for any visitor to Moscow: the first glimpse of the spectacularly colourful St Basil's Cathedral across the vast expanse of Red Square. For many foreigners it is the ultimate symbol of everything Russian.

Deal flow

Turning 13 disparate institutions into an investor-friendly flotation as Bank of China Hong Kong was never going to be easy. But then came NPLs, scandals, fear of guilt by association with Andersen and crashing markets.

Issuer: Barclays Bank plc Amount: $1 billion Launched: 18 September 2002 Bookrunner: Barclays Capital

US business and politics

Fund management and custody

Russia

Sovereign debt

Japan

Padraic Fallon, chairman of Euromoney Institutional Investor, presented the 2002 finance minister of the year award to Bulgaria's Milen Veltchev and the central bank governor of the year award to Australia's Ian Macfarlane at the Omni Shoreham Hotel in Washington at the end of the annual IMF/World Bank meetings.

Finance ministers and central bank governors gathered in Washington for the annual IMF/World Bank meetings last month at a time when the global economy showed little sign of sustained recovery.

Last month I argued that the summer rally in US equities would not last. The S&P index hit its year low on July 23 at 797. It rallied to 972 on August 27. Now it's back below 900. In August, investors had turned bullish on hopes of interest rate cuts. And they were encouraged about corporate governance: CEOs signed off accounts with few nasty surprises.

At the top of the market, every ambitious bank wanted to own a global asset management operation. They were prepared to pay high prices for supposed steady earnings providers. But as markets have plunged revenues have tumbled and now banks are wondering what investment houses are really worth to them.

Alan Greenspan may say it is "very difficult to definitively identify a bubble until after the fact" but the study of bubbles is far older than he is. This year is the 150th anniversary of the classic text on manias, financial or otherwise: Charles Mackay's Extraordinary Popular Delusions and the Madness of Crowds.

When David Komansky, chairman and CEO of Merrill Lynch, bought Mercury Asset Management in 1997, he called it "the crown jewel of asset management". After years of poor performance, client defections and court cases, it's unlikely he would refer to it in such glowing terms today.

Telecoms

Nigeria is in an economic and political mess but by no means insolvent. Why then does it look likely to default on bond payments?

Marconi’s restructuring is troubling the derivatives market. The banks that have bought protection against the company are unsure whether its agreement with lenders counts as a credit event. Could banks find their credit swaps against other companies are similarly vague?

The pizazz of the early days of e-forex is over as e-trading becomes more pervasive and commoditized. With all the main players now in the e-market, a core need is to differentiate yourself from competitors.

The unwelcome onslaught of formerly high-grade European credits on the high-yield bracket has increased the risks in an already concentrated and volatile market, increasing investor uncertainty.

Broader groupings among German mortgage banks, such as the long-awaited Eurohypo, look to be the best route out of a depressed market.

Equities clearing

North Korea is planning to set up a special administrative region and create a financial and commercial centre to rival all others in Asia. The North Korean authorities say the area will be autonomous, with its own legislative, judicial and executive powers.

The world’s largest financial services firms are realizing that Muslims would increasingly like to invest through Islamic funds. These are growing in number but have had a rough ride in the global bear market since many of them were heavily invested in technology stocks.

President and CEO, Delta Capital

Cash-strapped insurers are rushing to replenish funds through rights issues and secondary offerings. Most can justify them on the basis of poor results, but isn’t one of them, Legal & General, being a little greedy?

Russia

The legislative push against corporate malpractice in the US looks set to place a burden on foreign companies listed there and might discourage others from joining them.

As investment banks turn ever more to proprietary trading to make profits amid the market slowdown, their reported earnings are becoming increasingly volatile. This quarter, Goldman made a bundle and JPMorgan took a hit. Next quarter, who knows? Investors and ratings agencies are becoming worried.