Published in conjunction with: Banco Santander Totta Caixa - Banco de Investimento

The global financial climate has forced treasurers to focus on making the best use of resources, wherever they may be. Technological developments are making that easier, but they are also having to cope with a tighter regulatory environment.

"It’s quite hard to make a case for subordinated debt at all"

The New Yorker magazine has offered an intriguing morsel of insight into the days after the Lehman Brothers collapse. According to the article, Tim Geithner, then president of the Federal Reserve Bank of New York, received a call from a "titan of the financial system" (as Tim put it), who said he was worried but doing fine. Immediately after ending the call, Geithner called the titan back and said: "If anyone hears your voice, you’ll scare the sh*t out of them."

Whether or not former governor of Alaska and sometime vice-presidential candidate Sarah Palin’s speech at the CLSA investors’ forum on September 23 was a hit with the audience – and opinions are divided – there’s little doubt that both she and her hosts did well from the event. Palin’s speaker fee was undisclosed but is likely to have been substantial; CLSA, meanwhile, adopted a media-unfriendly strategy that ended up winning it plenty of attention and all-important coverage of the event. Media sources, hoping for one of Palin’s trademark gaffes, were frustrated by CLSA’s policy of holding the session behind closed doors. Of course in the modern era absolute secrecy was unlikely (and probably unwanted by the media-savvy CLSA). Almost as soon as Palin’s speech began, audience members began sending their thoughts to social networking site Twitter; within hours of the speech’s conclusion they and business newswires were posting substantial excerpts online.

On September 11 BGC Partners held its Annual Global Charity Day, involving the slightly bizarre sight of well-known (and indeed not-so-well-known) celebrities wandering around the inter-dealer broker’s trading floors taking calls from clients.

The leaders of the world’s banking industry will be relieved to know that someone is there to help them overcome their inhibitions and rebuild their damaged egos.

"I’m afraid he’s on gardening leave and could be for a while. You should see the size of this guy’s garden. I think it’s called Buckinghamshire"

Sheila Bair is running short of funds. But she is right to want to raise them in a way that doesn’t create a panic.

Hybrid capital may no longer be welcome in the US and Europe but it is playing a valuable role in the emerging markets.

HSBC moves its chief executive to Asia not a moment too soon, as it seeks to grow earnings while international banks pull back.

A worrying trend has surfaced in emerging markets as volatility hit China’s hedging contracts.

Ankara ought to reveal the source of a $15 billion windfall in its budget.

Calderón needs tougher measures to solve the fiscal deficit problem.

Lloyds’ bumper RMBS is good news but it doesn’t fix the market.

A romantic, old-fashioned style of banking business is enjoying a revival in the US. Smaller banks are gaining customers who are disillusioned with their bigger, national competitors. The White House is encouraging the trend. But should they be worried about banks that are too small to be saved?

France’s parliament amended article 2011 of the civil code on September 17 to help the structuring of Islamic financial products in the country using the French equivalent of trusts.

Guarantees from its parent remove the big risks; It sets out modest targets for a return to profitability

The yet-to-be-named trade aggregation service launched by CLS and Icap subsidiary Traiana in April received a fillip in September when Goldman Sachs became the latest bank to say it would support it. It joins the seven founder banks: Bank of America; Credit Suisse; Citi; Deutsche Bank; JPMorgan; Morgan Stanley and Royal Bank of Scotland.

Bradesco, one of Brazil’s leading banks, and Portugal’s Banco Espírito Santo have joined forces to create a new private equity company that will operate in Brazil.

Hopes to raise equity up to $500 million; Turns away from real estate development

When the Federal Republic of Germany enters the capital markets for a syndicated foreign-currency deal you know the circumstances must be special. Past weeks were remarkable as Austria joined its neighbour: both returning to the dollar market for the first time in four years. A number of Europe’s frequent issuers took advantage of the substantial saving available from issuing in dollars and swapping back to euros.

Investment bankers have always had a reputation for innovation – perhaps one they want to downplay right now. But a tour of the leading capital markets houses on Wall Street, almost a year to the day after the collapse of Lehman Brothers, gave the impression that they had learnt a new skill: the ability to bend time.

Gordon Brown’s government has no clear strategy for dealing with the budget deficit. Nor does its likely successor, the Conservatives led by David Cameron.

A flurry of announcements during September heralds the end of an era in US banking. The banks themselves will hope it also presages a new, calmer period for their own institutions and the financial markets.

Policymakers like to talk up the dollar. But an orderly decline of the greenback would be no bad thing.

Governments and the broader public sector are increasingly seeking the sort of service improvements that can draw on cash management specialists’ expertise. Laurence Neville reports.

SW Asset Management, a new fixed-income fund, is demonstrating its enthusiasm for emerging market firms by investing in their debt and exploring the credit default swap market. Dominic O’Neill reports.

Regional and multi-regional cash management banks have a chance to expand their markets and force global providers to rethink what they offer. Will they seize their opportunity? Laurence Neville reports.

Keen to avoid pitfalls of FXMarketSpace; Flexibility and cooperation key

New firms target middle-market clients via strategic alliances; Private banks and family offices seen as possible rich vein

Three become five as clients choose multi primes; JPMorgan expands Bear Stearns’ platform

Terms of bond offer announced; Company has 21 days to complete restructuring

An aim of tapping into the potential of robust, transparent and ultimately investable FX indices has resulted in FTSE Group launching its FTSE Currency Forward Rate Bias (FRB) Index Series in conjunction with Record Currency Management. The FRB series effectively provides a carry strategy on the dollar, euro, yen, sterling and Swiss franc. Record’s research suggests that FRB provides a fundamental and sustainable return stream that rewards the risks associated with holding higher-interest-rate currencies. The index series is based on data going back to 1978 and shows a long-term return comparable to global equities and superior to global bonds, but with lower volatility. Ultimately, the hope is that products, such as ETFs and futures, will be based on the indices.

Sovereign tests appetite for a $500mln bond; Government confident of strong growth

The news that HSBC’s chief executive, Michael Geoghegan, will move to Hong Kong has been greeted as further proof of the importance of Asia to the world’s top banking franchises.

Stimulus measures to be retained; New oil finds boost growth prospects

A new ‘currency’ was launched in early September, when the WDX Organization used its synthetic Wocu – world currency unit – to trade on the Bordeaux Wine Exchange. The symbolic transaction will, WDX hopes, lead to swift acceptance and use of the Wocu as an international global unit of account. Ostensibly, the Wocu is little different from other basket products offered by numerous banks. Where it perhaps differs from bank offerings is in its independence. WDX has established an institute to ensure its integrity and it hopes that its proven low volatility – it has been back-tested over 10 years – will help to increase its chances of acceptance.

Citi has hired Rodney Tsang, previously Merrill Lynch’s head of China private-sector coverage, as co-head of China investment banking. Tsang will report to Farhan Faruqui, head of Asia Pacific global banking, who says of the hire: "The non-SOE [state-owned enterprise] sector in China has been growing for the past few years, and it’s an area we’re continuing to invest resources in. Rodney’s hire is an important incremental step in that direction, not only because he has good relationships and a lot of credibility with clients but because his track record in sectors including general industry, consumer and real estate complements the expertise of our existing team very well."

Barclays Capital has rolled out an improved version of its highly rated Barx trading platform.

Morgan Stanley’s incoming CEO explains strategy; Mack and Chammah take new responsibilities

Barclays’ decision last month to move $12.3 billion of credit market assets to a Cayman Islands-registered fund prompted a frenzy of interest, combining as it did the twin bogeymen of toxic assets and off-balance-sheet vehicles. Barclays chief executive John Varley describes the deal as a further step in its "efforts to manage down the quantum and volatility of our credit market exposures" – already reduced by 30% in the first half of 2009. But it seems to be driven far more by concern about the monoline guarantors that wrapped many of these securities rather than the assets themselves. The transaction involves the sale of $2.3 billion of US RMBS, $1.8 billion of whole loans and $8.2 billion of assets wrapped with monoline guarantees to a fund, Protium Finance LP. Protium is a medicine frequently used to treat heartburn and acid reflux – not the most promising indicator of the desirability of the portfolio.

Tough medicine has been doled out at Citi since the arrival of Derek Bandeen as head of global equities trading last summer. After a blunt diagnosis of the problem – too many people doing the wrong things – the global equities division went through a dramatic shake-up in which it shed just over a quarter of its staff.

US venture focuses on private sector deals; Two-way trade growing

Antonio Acosta, the co-president of Banco del Pichincha, the largest bank in Ecuador, is confident 2009 will be a good year for the bank. He tells Euromoney why he is so positive about prospects.

Daiwa, Nikko split from commercial partners; Kirin/Suntory shows corporate Japan’s pragmatism

Credit-quality and profit-growth troubles; Subsidiary in Syria to undertake IPO

UBS appears to be once again expanding its FX business with a series of senior appointments. Chris Vogelgesang, who spent 13 years at Merrill Lynch in senior roles before taking a break from the industry, has joined as global co-head of FX. Vogelgesang, who will be based in Zurich and report to Dimitri Psyllidis, shares the role with Singapore-based Arie Adler, who continues as head of FICC, Asia ex-Japan. Electronic trading pioneer Simon Wilson-Taylor, who left his role as head of State Street’s Global Link division in January, has also joined the bank as managing director and global head of e-commerce. He reports to Fabian Shey and is based in Stamford, Connecticut. UBS has also poached Andy Durrant from the CME in the new role of head of e-marketing in Europe. He will be based in London and report to Julian Wantling, co-head of FICC distribution, EMEA, as well as to Simon Wilson-Taylor.

Two former JPMorgan bankers have launched a hedge fund that invests in fixed-income instruments in Russia, Kazakhstan and Ukraine.

Convertibles are attractive but illiquid; Investors are desperate for new issues

In December 2008, I wrote a piece about Barclays, criticizing the expensive £7 billion capital-raising from Middle East investors and the decision to purchase Lehman’s US broker-dealer last September when the outlook for investment banking was at its most opaque. The article elicited howls of outrage from Barclays’ supporters. One indignant reader snorted: “I am encouraged by your criticism of Barclays’ management.”

Merckle may have committed suicide because his empire was floundering but if I were a senior manager of a bank that is still in receipt of funds from the Troubled Asset Relief Program (Tarp), I might feel a little suicidal myself. In late September, I read a document enticingly entitled: ‘Practical considerations for implementing a luxury expenditures policy’, produced by Navigant Consulting. I don’t think I have laughed so much since details of the refurbishment of former Merrill CEO John Thain’s office surfaced.

Bankers like to think of themselves as entrepreneurs and when the leveraged finance market died many specialists were reborn as restructuring professionals.

I congratulate Morgan Stanley’s board for having made a decision rather than tiptoeing around the succession story until it became the elephant in the room. But there will be challenges ahead.

The spectacular rally in the US high-yield market this year has spilled over to Europe, raising the tantalizing prospect that, after several false starts, this asset class could finally establish itself. Louise Bowman reports.

Along with its peers Russia’s Alfa Bank has been battered and bruised by the financial and economic crisis. Its president, Petr Aven, tells Sudip Roy how the bank is battening down the hatches.

Italian insurers suffered badly from the Lehman bankruptcy thanks to investments in structured notes. The result is a regulatory shake-up to fundamentally change the way structured products are sold and distributed. John Ferry reports.

A year after acquiring Lehman Brothers’ Asian and European businesses, Nomura says it is halfway to building a global investment bank. Few people outside the firm think it will succeed. To some, it is already the ‘other Lehman takeover’. But Nomura’s leaders are determined to win the battle. Lawrence White and Helen Avery report.

Bank of England deputy governor Paul Tucker understands bankers’ fear of excessive regulation, but he’s not easing up. He insists banks should improve the quality of their capital and sees no role for subordinated debt. He wants strong banks to blow the whistle on the weak and to know that, in future, the shareholders of survivors will pick up the tab for bailing out the system. Peter Lee reports.