Bankers claim a regulatory blunder in the offing will force securities trading activity out of the EU if it goes ahead, writes Emma Barraclough

Barclays Capital treated 400 clients to a spectacular display of dinosaurs at the bank's annual fashion show at London's Natural History Museum last month.

Bond issuers may occasionally give their bankers the run-around in an effort to reward other relationships or cut their fee bills.

Indian privatisation got the thumbs-up from the capital markets when investors bid over 10 times the number of government shares offered for sale in Maruti, India's biggest car-maker now controlled by Suzuki Motors.

Few areas of the capital markets are as dominated by the old school tie and boyish bad behaviour as the inter-dealer broking community. It's an industry that, rightly or wrongly, is still seen by many as the last place you can land a job without having a degree.

What do you get when one Korean financial institution merges with another?

Never mind who dies in the new Harry Potter book - the literary subject inspiring the most avid speculation is what was in David Glenn's diary.

Something very odd is happening in the bond markets. At a time when risk aversion is at the forefront of investors' minds, they are piling into junk bonds in such volumes that they have squeezed yields down by around a third since October 2002.

At the Securities Industry Association's fourth annual market structure conference in June, representatives of Nasdaq, the ECNs and the NYSE sat under the glittering chandeliers of New York's Grand Hyatt slinging mud at each other.

Nearly three months after UK hotels and pubs group Six Continents demerged, the thorny issues that the split threw up surrounding successor companies and credit derivatives have not gone away.

John Fraser doesn't often have two hours to spare for a meeting at his London office. The jovial Australian CEO of UBS Global Asset Management (UBSGAM) currently spends 60% to 70% of his time travelling.

UBOMIR MINCHEV, EXECUTIVE director of mobile telephone software company Telelink, is one of the new breed of Bulgarian entrepreneurs. Like many of the country's leading politicians and businessmen, Minchev is a former investment banker. He set up Telelink only two years ago and has seen it grow to a point where it employs more than 100 people. Most of them are young and all but a handful have university degrees.

Bulgaria's finance minister, Milen Velchev, has an impressive record. His country's economic fundamentals are far better than those of many in central and eastern Europe. But the population hasn't got the feel-good factor.

Nikolay Vassilev, Bulgaria's deputy prime minister and economy minister, rushes back into his office shortly after midnight on a Friday, having been locked in meetings all day. His dinner is a McDonald's hamburger and chips, forced down as he begins yet another meeting. Bulgaria makes very different demands to those Vassilev faced when he was a London-based investment banker. However, he remains enthusiastic.

Recently a headhunter approached a member of the fixed-income department of a leading international bank to try to recruit him for a rival. The candidate, intrigued by the sound of the job, decided to pursue the matter. But it soon turned out that the hiring bank was the very one he had walked out of just months before.

EQUITY CAPITAL MARKETS are back on track - at least if the furious activity of the last week of June is anything to go by. In the US alone 23 deals came to market, according to Dealogic. Of these, 11 were convertible bonds. They included the second largest of the year to date, a $4 billion single-tranche offering from General Motors as part of a bumper pension plan refunding that also included a $13.5 billion multi-tranche, multi-region bond issue.

Source: www.breakingviews.com is Europe's leading financial commentary service

You've got to take your hat off to General Motors. At the end of last month the embattled US auto company raised about $47 billion. The banks stumped up $29.5 billion in syndicated loans, bond market investors handed over $13.5 billion, and a $4 billion convertible bond accounted for the rest. Proceeds from the bonds and convertibles were explicitly earmarked for sorting out GM's pension fund liabilities.

BUILDING THEIR STRATEGIES on prospects of a fast-growing economy, Greek banks are trying to take advantage of top-line growth to rationalize their cost structure. At the same time, expansion in southeastern Europe has taken priority over consolidation at home. Greek banks are walking a fine line. The realize the local market is too small to satisfy their growth ambitions, but are wary of the costs and risks of expansion.

ON THE POSITIVE side, the sale of DSK Bank to Hungarian bank OTP for e311 million means that the entire Bulgarian banking sector is in private hands and more than 80% of shares are owned by foreign investors. The government has also said it is committed to breaking up and selling off its electricity distribution sector in seven companies by the end of the year.

There are several big bubbles driving the global economy and its financial markets. There are the twin bubbles of US household debt and house prices, driven by easy money. And there is the Japanese government bond bubble, fed by excess savings and cheap credit. But the next great bubble in the world is continental European (principally German) labour. This euro wage bubble is sustained by sticky prices and state subsidies.

SENIOR EXECUTIVES OF companies that have taken the plunge and invested in Bulgaria talk enthusiastically about their experience. They cite the stable political and economic climate, the high qualifications and low cost of managers and staff and the ready access to EU and Balkan markets as reasons for their success.

Euromoney talks to Simeon Saxe-Coburg Gotha, Bulgaria's prime minimster and former king.

Life doesn't seem so tough for fund managers when they can bask in the sun by the Mediterranean, sipping Pimm's on the roof terrace of Le Méridien in Nice contemplating when a market revival might come. It's certainly a more enviable situation than that faced by clients back home wondering if they will ever be able to afford to retire.

Source: www.breakingviews.com is Europe's leading financial commentary service

Source: www.breakingviews.com is Europe's leading financial commentary service

Source: www.breakingviews.com is Europe's leading financial commentary service

Suspicions that another Chinese banking scandal was about to break first emerged on May 29 when Liu Jinbao, head of the Bank of China (Hong Kong), was suddenly recalled to Beijing by his bosses. The Bank of China at first insisted that it was just a routine relocation.

By Simon Pirani

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