After what could be described as a difficult conception and then arduous labour, foreign exchange settlement system CLS has gone on to thrive in the first five years of its life. Lee Oliver reports.

Takeover of partner Synthesis Bank is central to planned expansion into wealth management.

Cash management is a hugely attractive business for the banks that have ended up at the top of the consolidation pile, with earnings stability and high returns on equity. And despite reductions in activity because of such developments as the Single Euro Payments Area, new business is emerging in white-labelled products and financial supply chain management. Laurence Neville reports.

JPMorgan is making a big push in the Middle East, and particularly in Islamic finance, after announcing last month that it had hired some of the biggest names in investment banking in the region.

Banks are rushing to offer investors access to exposures designed to replicate the performance of hedge funds but without the high fees and other drawbacks. But their replication methods are increasingly being called into question. John Ferry reports.

As volatility spreads across the debt markets, the CMBS market is taking stock. Property derivatives are likely to increase volatility in the market and contribute to spread widening just as refinancing activity – a significant driver of CMBS volumes – slows. But as competition between commercial lenders and conduit lenders expands across Europe, the market is looking to new jurisdictions to maintain growth.

I do expect some tales of woe. I am nervous about UBS and Deutsche and concerned about Merrill.

The allure of private equity to senior banking figures is well documented: why run a business for a bank when you can run a fund for yourself?

Hedge funds are supposed to perform well when mainstream markets are falling: that’s when their capacity to go short and their managers’ selection skills have the best chance to outperform long-only managers that do no better than replicate the index. That’s when they earn their two and 20. At least, so the theory has it.

Negative headlines continue but innovation is reviving CPDOs.

Thomas Fischer’s grand plans for WestLB were doomed to fail. Now potential buyers are trying to work out how they can make money out of what’s left. But could Fischer’s bold but ultimately futile attempts indirectly herald the shake-up that the German banking system so desperately needs? Philip Moore reports.

Bank to expand retail business.