Just suppose the World Bank's major shareholders decided they could use their money better elsewhere. Who would get the mandate to unwind or sell the bank's loan portfolio and how would it be done? One consultant, who prefers not to be named, suggested this as a hypothetical exercise, but colleagues feared it would be biting the hand that feeds them.

Management sages are rife but the office is an unenlightened place. Bob McGinnis, head of consumer asset-backed debt at Greenwich Capital in the US, complained to Euromoney that the French windows in his office didn't open and he couldn't practise his golf swing. When his comments found their way into print he was deluged by self-righteous colleagues and clients deploring his waste of valuable time contemplating leisure. For them the best office is one with no windows and the employees locked inside.

Philosophers have debated ethics for thousands of years and come up with more questions than answers. But now a super-smart Swiss asset manager has launched an ethical fund using a quantitative model to determine how naughty or nice companies are. Their efforts may not impress followers of Plato, Kant and Hume but will they persuade socially-concerned investors to part with their cash?

Deutsche Bank speaker Rolf Breuer recently boasted that his bank's value-at-risk (VAR) models were the only ones in Germany to be approved by the supervisors in Berlin.

Issuer: EuroCredit CDO 1

A new advisory science has been born this year in Europe: how to launch and defend hostile bids. The aggression and free-flowing finance are straight out of America, but the old continent's politics add an extra level of difficulty. The latest landmark battle, following the struggles for Telecom Italia, Gucci and Société Générale, is raging in the French oil sector. TotalFina's raid on Elf Aquitaine, and Elf's counter-attack, highlight once again the primacy of politics in shaping French business. The battle also provides Europe-wide lessons for the M&A tactical manual.

When Armínio Fraga quit his job at Soros Fund Management to become Brazil's central banker he was dubbed a "poacher turned gamekeeper". But he is no stranger to the public sector. With stability restored he is now modernizing Brazil's finance sector. Brian Caplen reports

Meet the new breed of Asian banker - the ones who survived the crisis and are now able to put their hard-learned lessons into practice. They are leading the way into a new era of openness and transparency in Asia.

The 17 superchefs of the European Central Bank who sit on its governing council have 17 ideas about how to set rates, and how transparent the process should be. From the orthodox toughness of Duisenberg and Issing to the softness on the Nordic and southern fringes. Here are the two Germans, two Frenchmen, two Dutchmen, two Finns, two Spaniards, two Italians, the Austrian, Irishman, Portuguese, Belgian and Luxembourgois who rule euroland. By David Lanchner

Fringe protesters at the IMF/World Bank annual meetings are nothing new. But once they could be easily dismissed as Utopians or religious nutters not worth taking seriously. No longer.

After eight years of campaigning, Germany's private-sector banks finally won a judgment in Brussels against WestLB's contentious capital-raising scheme, striking a blow at the financing privileges of state-owned banks. But WestLB chairman Friedel Neuber barely missed a beat: in less than a month he had demonstrated his political shareholders' loyalty by arranging yet another capital increase. Cowed by an angry government, the private banks dare not take the challenge to its logical conclusion. They fear losing more than they would gain, says Laura Covill.

Last month Front End had a little jest at the expense of one of the runners in the Chase Corporate Challenge fun run recently held in London's Battersea Park. One brave soul, you may recall, was spotted heading for the finishing line in a Yamaichi T-shirt.

Ireland has transformed its economy in recent years, luring multinational companies by offering low taxes and well-educated labour. Its participation in European economic and monetary union has also been an attraction. The economy has boomed. Ireland is running budget surpluses and paying down its debt out of privatization proceeds. But being a small nation in euroland also brings difficulties, like wholly inappropriate interest rates. The Irish economic miracle could be heading for disaster -- extraordinary rates of growth could well lead on to rampant inflation. Nick Kochan reports

The announcement from Jamil Mahuad, the president of Ecuador, that the country would not meet a coupon payment on its Brady bonds due at the end of August and that Ecuador intends to restructure its $13 billion of foreign debt, has dismayed banks and investors across the developed world.

James Wolfensohn is about to reach a milestone. His five-year term at the helm of the World Bank is coming to an end. US president Bill Clinton will shortly decide whether to reappoint him. James Smalhout examines the record.

World Bank president James Wolfensohn believes the Bank is becoming a more caring place, closer to the client it's trying to serve. One advanced management course includes a taste of poverty: living a week in a slum or village. Social aspects must match financial and macro concerns, he tells James Smalhout

Edited by Brian Caplen

Equities might enjoy all the glory at the moment but watch out for credit. This techno-laggard of the financial markets is set for an electronic great leap forward. If proof were needed - even the venerable CBOT has been showing interest. Antony Currie logs on.

Banks, like priests before them, have survived in part because of their monopoly of information and access. The internet is changing all that. As Steven Irvine argues, the data and choices that can be accessed with a mouse click must mean the death of banks as we know them.

Ten years after the Japanese stock market suffered its dramatic plunge, following a decade in which the Japanese economic model - with its corporate cross-shareholdings, scandal-ridden financial sector, and notorious convoy system which prevents well-managed companies from outperforming the bad - has been pilloried, Japanese equity markets are suddenly soaring.

In the run-up to the European single currency there were expectations of major political changes that might take place after monetary union leading to more decentralized funding, with local authorities and regions issuing more and sovereigns less. Generally in the eurozone this change has been slow in coming. Spain is a key test case. Any significant increase in debt issuance by local authorities may hinge on political horse-trading between the central government and the "fast-track" autonomous regions.

When former paratrooper and failed coup leader Hugo Chávez was elected president of Venezuela in December promising to do whatever was necessary to improve the lot of the bulk of the population, the country's bankers weren't sure what kind of treatment they could expect. They are beginning to find out.

"Unreal city," wrote TS Eliot about London in his 1922 poem The Wasteland. If London induced feelings of bewilderment in Eliot one struggles to imagine what he might have thought about Washington DC. Between M Street in Georgetown and Independence Avenue on Capitol Hill are a couple of square miles into which many of the world's most rarefied institutions are concentrated. Here decisions are taken with resounding affects both across the US and the world. Yet the institutions are cocooned from the actualities over which they preside. There is an air of unreality about majestic Washington.

The figures are alarming. A worldwide survey by Standard & Poor's shows that 55 rated companies failed in the first half of 1999, defaulting on total debts of $20.5 billion. That easily exceeds the 37 failures and $8.3 billion in defaulted debts in the second half of 1998, when the rising default trend began. What's worrying is that, while common sense and historical data teach that the level and volatility of default rates rises in a recession, the US is in anything but that.

Nothing surprises crisis-hardened Desmond Supple any more, but even he was left slightly baffled by Malaysia's bid to resurrect talk of a single south-east Asian currency. Supple, head of research at Barclays Capital in Singapore, deftly reeled off reasons why, in his opinion, such a concept would not work, at least for the foreseeable future. Variations in development levels between the countries and differences in business cycles are top of Supple's list.

The emerging markets are bouncing back - at least some of them are. While they do, the market is holding its breath as crisis-hit countries implement fiscal and monetary reforms. And while economists believe growth rates will improve, they are also resigned to sovereign defaults on foreign debt. Commentary by Rebecca Cicolecchia, research by Alexa Marx.

by David Roche

Emerging market bond investors have up to now been extraordinarily ill-served by the index compilers. Only JP Morgan has made a concerted effort to provide a benchmark index to track emerging market debt, and its Emerging Market Bond Index (EMBI) and EMBI+ have as a result become the market standards.

As the risk of a round of sovereign bond rescheduling looms, bondholders are dusting off the documentation to see what it says. By Christopher Stoakes

A handful of US congressmen have the IMF and World Bank at their mercy. When it comes to fresh capital or even the subject of US withdrawal, these are the guys who have the casting vote, with a mind to their own re-election. Some, like congressman Sonny Callahan, chairman of the House foreign operations committee, are more supportive than others, who'd prefer the IMF to be shut down and the third world left to market forces. The US Treasury and others with a less parochial view have to tread tortuous paths through Senate and House committees to push through the administration's foreign policy. The multilateral institutions have hung back from lobbying on Capitol Hill, but one day it could be a matter of survival. Brian Caplen reports.

World Bank guarantees are a new way to help crisis-hit countries back into the private capital markets. But the Bank still wants to lend money. James Smalhout reports

The great and the good have come up with a seven-point plan to stave off financial crises and benefit the developing world. Are they building castles in the air or laying the basis of a new financial architecture? James Smalhout reports

The dynamics of the US equities market are such that the old system cannot last much longer without fundamental change. Internet trading, the recent appearance of electronic commissions networks, forthcoming shorter settlement times and decimalization of stock quotes are all turning the screw. Antony Currie reports.

Forget about the euro. Forget about Y2K. These are no more than simple exercises in crisis management. E-commerce is what you should be preparing for: get the power of the internet around you. It is a power that is revolutionizing equities trading, a power likely to spread into core investment banking, in the process stripping away the inefficiencies previously integral to the financial system. Established market leaders already face an array of upstart competitors. There are new banks, new trading systems. Pricing and research are the main targets. All-comers now have access to liquidity. Huge amounts of research are freely available. Ma, Pa and the Belgian dentist can pile in there with the best of them. All under the cloak of anonymity. As a senior investment banker puts it: "This business used to be a pitched gun-battle. It could get messy but you knew who the opponents were. Not any more. It feels as if we're being shot at from every direction." Heed his words but don't delay in joining the fray. Three years will be too late. E-commerce is the power of the future. But it's here now. Antony Currie goes behind the wires to report from the new frontier.

Eisuke Sakikabara, alias Mr Yen, retired last month as Japan's vice finance minister for international affairs. A forthright bureaucrat who kept the market on its toes with his timely comments, his career path was not typical of MoF officials and included a period in academia. A fluent English-speaker, he talked to Steven Irvine shortly after he stepped down. The only thing he wouldn't discuss was the way the yen was heading - something of a paradox given that the currency was formerly his favourite subject.

Elections have a nasty habit of destabilizing Latin America's fragile financial markets. The latest election-inspired jolt came in July when Eduardo Duhalde, Peronist party candidate for Argentina's presidency, suggested that the country might not need to pay back all its debts. The impact was felt throughout Latin America. Spreads on bonds widened, stock markets fell and currencies weakened. While some Latin issuers have taken advantage of brief windows of opportunity to sell bonds and equities this year, many are struggling to raise finance, while much of the region heads into economic downturn. Michael Peterson reports

All you need to make good money in Brazil is a banking licence, a few retail outlets and faith that your biggest customer will keep up payments. You don't need to worry too much about credit analysis, operating efficiency or branding. Risk-management skills may help you make even more money, but if you don't have them, relax, you should still come out ahead. Michael Peterson reports

ARAB 100: Methodology

Last year's Russian crisis had one unexpected spin-off. For the first time investors started to differentiate between Russian risk and that of Kazakhstan. It was good news for Kazakhstan as Ted Kim reports.

Hyperinflation, a stalled privatization process, a lack of raw materials and a national currency near-impossible to convert have understandably encouraged the view among foreign investors that Belarus is an economic basket-case. But, as Theodore Kim reports, for the adventurous it's one of the cheapest places in the world to do business and it does have an industrial infrastructure so massive that it earned a reputation as the assembly plant of the Soviet Union

Credit and swap spreads have already risen in anticipation of the world's financial markets clamming shut this December. Borrowers and bankers talk nervously about the disappearance of liquidity and short-term funding in the run-up to year 2000. Central banks are on standby. So are some traders who hope to take advantage of illiquidity and mispricing. The frustration for many is that it is their own contingency plans, not their computers, that threaten chaos. But no-one knows how fierce the full millennium effect will be. Marcus Walker reports

In the past six months international investors have differentiated central and eastern European countries they once grouped together. Economic performance and market development have varied widely, partly reflecting how badly each country was hit by the Russian crisis. The gap between the richest and poorest is growing, and there is increasing polarization between the first wave of applicants to the EU (Poland, Hungary, Czech Republic, Estonia, Slovenia), the second (Bulgaria, Romania, Slovak Republic, Lithuania, Latvia), and the former Soviet republics. Rebecca Bream reports on Poland, a leader in attracting foreign interest.

The Asian crisis delivered a devastating blow to the region's sprawling conglomerates. For years they diversified and grew rapidly, feeding on a rich diet of debt, much of it in foreign currencies. Then suddenly their markets collapsed and their debt service costs soared. But the bad times are ending and after drastic restructuring the best companies are on the move again. Alex Mathias reports.

Last month an earthquake brought Turkey's economy to a temporary standstill. It was already in the throes of a recession. Now it's time to rebuild, take advantage of extra sympathy from the IMF and international capital markets, and perhaps revitalize and reform the country in a way that wasn't politically possible before August 17. Metin Munir reports.

As Daewoo, once symbolic of the strength of new Korea, is forced into dismemberment because of crippling debt, the government hopes the demise of the second largest of Korea's chaebols will spur others to restructure to avoid a similar fate. However, there is a worry that economic recovery has taken some of the pressure off chaebol chiefs. Steven Irvine reports

Croatia has too many banks and most of them are poorly run. Bad debts are on the rise. Related lending has been widespread. The government has taken some banks under its wing and hopes to rehabilitate and privatize them. Yet fundamental reform of the sector is coming too slowly and in insufficient doses. Alex Mathias reports.

When the ministry of finance regulated banks in Japan the watchdog turned a blind eye to foreign banks doing things domestic ones couldn't. Not that there was anything illegal in the lucrative business of creating structured deals for firms intent on disguising losses. The new regulator - the FSA - takes a different view and has imposed an exemplary clampdown on Credit Suisse. There's apparently a limit on the number of times something legal can be done if it's deemed against the public interest. The bankers are bemused by the vagueness of it all and so is our reporter Steven Irvine.

Rolf Breuer, speaker of Deutsche Bank, defends the purchase of Bankers Trust

Bankers tossed out of jobs in last year's emerging markets crisis should now be brushing off their CVs. Quietly and cautiously banks are rebuilding their emerging markets teams - primarily in Asian and Latin American equities - in the hope that this year's momentum in the asset class will be sustained. ING Barings which was heavily criticized for radically downsizing a tip-top team is leading the way back.

Plummeting oil prices, turmoil in world markets and natural disasters: José Angel Gurría's first months as Mexico's finance secretary were a baptism of fire. But his legendary powers of persuasion enabled him to make vital budget cuts to keep Mexico on track. By Brian Caplen

Richard Deitz didn't realize how provocative his new firm's name would be when he set it up in Moscow after the crisis. VR Group, the snipers say, stands for "vozrozhdenie or vozkrezenie Renaissance" - Russian for Renaissance revival or resurrected. Others claim it means virtual Renaissance.

A consolidation wave has broken over the Arab banks. In Bahrain, Gulf International Bank and Saudi International have created a new giant. In Saudi Arabia, Saudi American Bank and United Saudi Bank merged. Years of low oil prices and weak economies are the spur, though banks are still making profits. Commentary by Andrew Beikos and Elena Antoniou

John Reed's pronouncements that Citibank and Travelers Group are not merging fast enough may be too severe. The banking group's merged corporate and investment banking divisions are trying their best to show otherwise.

It's huge, it's teeming with wild creatures, and it's fragile. In 1994 Deutsche Bank began to build an investment bank. In 1998 it restructured itself around corporate and investment banking. In 1999 it totally absorbed Bankers Trust. The result is a behemoth that relies heavily on global securities markets and the charisma of one man. Is this a safe vehicle for the next millennium? David Shirreff reports

There can be no stronger sign of progress in Russian financial structuring than the news of the revival of Inkombank, one of the institutions worst hit in the crisis.

The credibility of the UAE's stock market continues to be affected by the lack of a settlement, clearing and custody system - leaving it highly unregulated, devoid of transparency and subject to manipulation. But, Nigel Dudley reports, a regulatory system now seems on the way

Ever thought about dropping out of the City or Wall Street, and setting up your own little business, producing something real and tangible, perhaps even socially useful, and fostering it all the way to an IPO? If you're an investment banker, the answer is probably ... yes.