A ground-breaking collateralized debt obligation offering a fixed level of recoveries targets investors who want a simpler structure.

Asia's domestic wealth managers have to reassess their business models if they want to compete for the significant growth forecast for the market over the next three years.

With volume in the EMEA equity capital markets up 132% this quarter compared with the first quarter of 2003, according to Dealogic, European equity capital markets appear to be in rude health. The IPO market in particular, which raised $7 billion through 39 deals, is at its strongest since the fourth quarter of 2001.

Americans have been having a lot of fun with fundrace.org, a new website that searches the public record for political donations. Euromoney, of course, was most interested in gifts from US bank CEOs. George W Bush came out well on top, garnering the maximum $2,000 donation from almost every CEO on the list. But there were surprises among the Democrats. Dick Gephardt pulled in more donations than any other candidate and Howard Dean got none at all.

US treasury bond yields caught out many investors in the first quarter, tightening sharply below 4% in February and once more wrong-footing many who had been expecting that they would widen.

If you think loan trading is colourless and unexciting, take a look at Thomas Duetoft, head of European loan trading at Dresdner Kleinwort Wasserstein, and his colleague Tom Johannessen, vice-president of loan trading.

Last month, at Hong Kong's biggest party, the annual Rugby Sevens festival, an unusual trend emerged among Hong Kong's investment banks. The softer side of those hard-nosed masters of the universe was on display, manifested in the décor of their hospitality suites.

Several fund managers are taking advantage of the increased interest in currency markets by setting up high-margin currency hedge funds. But before they invest in such products, investors should examine the offerings closely. Julie Dalla-Costa reports.

Having suffered significant losses when the technology bubble burst, Scandinavia's high-net-worth individuals have become more demanding about products and services they expect from their banks. And with the number of wealthy predicted to rise, banks are being spurred to tailor their offerings to suit these clients. Helen Avery reports.

Money will, of course, remain cheap. Indeed, the forward market now forecasts that the Federal Reserve will not raise interest rates this year. But it has been cheap for a long time. It has already driven massive amounts into equities and reduced volatility to historical lows. In early January, the options put-to-call ratio reached levels indicating that no-one wanted to take out any insurance against equity markets falling. However, the recent turn in these indicators suggests that a wall of worry is now being built.

Russia's dependence on energy exports - and high energy prices - is growing. The government wants to play a bigger part in fostering this golden goose and seems to have found a subtle way of doing so without renationalization. Ben Aris reports.

The days when unselective punts on the Moscow bourse could bring triple-digit returns are probably over. Analysts now point to more modest gains from cautious trawls of smaller companies, private-equity funds and real estate. Ben Aris reports.

Just a few months ago Peru looked a shaky bet for international investors. Now bondholders can breathe a little easier. Peruvian president Alejandro Toledo still has the lowest popularity rating in Latin America and economic growth is slowing but Peru's macroeconomic fundamentals are solid and in keeping with IMF demands. It all looked very different in mid-January. Spreads on Peru's debt widened by more than 100 basis points as investors wondered whether Toledo's two-and-a-half-year-old government was on its way out amid corruption scandals. Four ministers lost their jobs in just three months and Toledo, who has a popularity rating of just 9%, struggled to distance himself from corruption scandals.

To attract investors, smaller drugs developers need to show that they have products close to regulatory approval. But to reach that stage requires vast investments of high-risk capital. There are no easy ways to plug the gap but alliances with big pharma and forward sales of royalties can help. Mark Brown reports.

Kazakh president Nursultan Nazarbayev, pictured below, surprised Anvar Saidenov when he appointed him as the new head of the central bank. But Saidenov has an enviable task in working out how to spend the new and growing wealth that the country is gaining from oil. Christopher Pala reports.

Delayed and inadequate reforms mean that Romania faces the prospect of failing to meet its 2007 deadline for entry into the EU. Guy Norton reports.

Liquidity poll April 2004

Customer pressure for a wider choice of top-performing products is driving banks into doing what was once unthinkable - selling their competitors' wares. But they are also finding this trend towards open architecture is encouraging them to focus on their strengths and improve their own performance. Helen Avery reports.

www.breakingviews.com

www.breakingviews.com

www.breakingviews.com

Results of Euromoney's biggest ever credit research poll indicate that the development of relationships with continental European investors is crucial to success.

Citigroup Private Bank has signed up golf legend Gary Player to act as an informal ambassador. As part of the multi-year endorsement, Player will represent the bank on his travels playing championship golf, and will "help to strengthen the firm's long-term relationships with some of the world's most successful families".

Bank reform and the development of a properly structured mortgage market have been on the Russian agenda for years. Only now does implementation look set to begin. Ben Aris reports.

The capital-raising supermarkets available to companies in most advanced economies are a long way off for Turkey. The shabby state of capital markets is in large part an outcome of years of public sector financial chaos. Metin Munir reports.

Agence France Trésor was nervous about becoming the first issuer of euro-denominated inflation-linked bonds but it is pleased with the results. Now its regular linker issuance schedule is helping to bring certainty to the development of the curve. Katie Martin reports

A new central bank governor with a firmer grip on exchange rate policy, a modest upturn in growth and a respectable equity market performance have increased confidence in Egypt's economy. But privatizations and banking reform are major uncompleted tasks. Nigel Dudley reports.

Madrid has returned quickly to some kind of normality following the terrorist attack last month. There is still a steady flow of mourners to the sea of candles that commemorate the victims, but elsewhere in Atocha Station commuters were streaming from the platforms within a week of the attack, just as they did before. The market has responded in a similar fashion. Although the Ibex 35 dipped sharply following the attack and the election that came quickly after, within a week it was moving broadly in line with the other major world markets. The main reason for this is that despite the shock of the Socialist Party (PSOE) election victory and the animosity between the two main political parties, the country's political divisions are more about the war in Iraq and the style of the outgoing government than economic philosophy.

A group of Harvard-trained physicists and astrophysicists are trying their hand at running a hedge fund in the US. Rather aptly they've called their firm Financial Labs and launched their fund at the end of last month. The five Harvard graduates set up their firm in July last year. Since then they have been developing a technological infrastructure that they feel differentiates them from other funds. Aaron Sokasian, co-founder of Financial Labs, says: "Our approach is extremely objective and numerically based. We don't really use any kind of discretion."

CEO, Banco Popular

If Banca Intesa follows through on its interest in Garanti Bankasi, Turkey's banking market and the general economy could receive a big boost. David Judson reports.

Ferit Sahenk, general manager at Dogus Holdings, suffered from unlucky timing the last time he tried to sell a stake in Garanti Bank to Italy's Banca Intesa. It was September 2001. The due diligence had been done twice over, all loose ends were tied. The only thing that remained for closing was the deal approval of Intesa's board.

Moody's introduced its baskets in 1999. As hybrid volumes increased and deals got more complicated, it refined them last November.

A bull-market in Indian equities last year sparked spectacular growth in the country's equity derivatives market, which began trading four years ago. Monthly turnover in equity derivatives grew almost fourfold last year and in February this year it accounted for two-and-a-half times the spot cash market turnover on the National Stock Exchange (NSE).The average daily equity derivatives turnover in January touched Rs150 billion (more than $3 billion).

Argentina has changed the rules of the debt workout game by refusing to make good-faith efforts to pay its bondholders. And it is easy to understand the logic behind this move. A country that defaults on its external debt pays a huge price both politically and economically. Once that price is paid, however, it starts to recover. The cost of curing the default is large; the benefits are vague, and far in the future ? certainly at least one election cycle away.

Three months into Croatia's new nationalist-led government's term, the verdict is so far, so good. The administration has worked double time to promote Croatia's chances of following neighbouring Slovenia into the EU. But it must now boost growth and get on top of the country's deteriorating public finances. Peter Lee reports.

Anatoliy Shapovalov, deputy minister of finance of Ukraine and head of sovereign borrowing

Its bonds have traditionally traded wider than Russia's, but with its potential for a diversified manufacturing economy and a resurgence in sovereign debt issuance, Ukraine is winning renewed interest from emerging-market funds. Nick Parsons reports.

Key French brokerages are remodelling their equities divisions in an effort to build a pan-European business. And the solution that BNP Paribas has found is the most radical. But rivals say its new joint venture is an admission of failure. Peter Koh reports.

Investors in European high-yield bonds have fought hard for structural security. Issuers that bypass it will have to pay a premium.

The inflation-linked market has unexpected pockets of demand, few natural issuers and an unusually close relationship between derivatives and bonds. But it works. Banks now need to work out where the next set of structural demand will come from and how to position themselves to profit from it. Katie Martin reports

With increasing competition in the covered bond market, Pfandbrief issuers are working hard to retain their pre-eminence. But as the Landesbanken prepare to lose their state guarantees, Pfandbriefe are becoming a crucial financing tool. Mark Brown reports.

CEO and founder, Lightyear Capital

Leverage in the emerging markets is now approaching an all-time high, according to fund managers and sell-side analysts. But the structure of investment patterns in this asset class means a crash is unlikely. Felix Salmon reports.

This has been an exciting few weeks for Commerzbank. First it smiled its way through yet more poor results, while promising better times ahead. Days later, it sealed a merger with a retail bank. Then it awarded such low bonuses to securities staff that it risked losing talent. Here, senior executives discuss the bank's strategy, prospects for consolidation and the trouble with bonuses. Katie Martin reports

Never let it be said that running a global financial services organization leaves you bereft of a sense of humour. Talking to investors in Singapore in February, Citigroup CEO Chuck Prince was reiterating his stance on future acquisitions. As Prince has publicly explained, the bulk of the $50 billion pre-tax net income that he wants Citigroup to be making in five years' time will come from organic growth. There will be no repeat of the Citicorp/Travelers merger of 1998, which was truly a transforming event for both sides.

The London office of Goldman Sachs is always a good place to spot slightly scary looking men in smart suits who are whispering down their sleeves. Usually these people are perfectly harmless traders. But one Monday morning in late March, even more of these characters than usual were to be found in the bank's swanky corridors. It wasn't "bring your secret service officer to work day", but because security had been beefed up for a visit from UK prime minister Tony Blair.

As BNP Paribas and Exane were preparing to unveil their joint venture plans, Crédit Agricole was deciding what to do with the equities businesses it had picked up along with Crédit Lyonnais last year. Crédit Agricole already had a strong brokerage business in the form of CAI Cheuvreux, which has the highest-ranked (13) pan-European research of any French broker, according to the July 2003 Thomson Extel Focus France Survey. Merging Chevreux with Crédit Lyonnais' weaker European brokerage business would have made little sense, as the overlap would have been too great. One French analyst says: "A good merger is one in which one plus one is more than two; Chevreux plus Crédit Lyonnais would probably be worth less than one."

The west should beware - it is about to be invaded by hordes from the east. They are not benefit-seeking immigrants but rather bargain-hunting entrepreneurs. Soon they might even be buying your bank. And in Turkey, local-born bankers with western skills are determined to drag their country into the modern capital markets era. Julian Evans profiles some of the leading eastern European entrepreneurs who are taking regional finance to a global level and Metin Munir looks at the pioneers seeking to pull Turkish banking out of stagnation.

When Coutts Bank decided to make the move from in-house investment management to external investment management, it did so in one year. "If you have a large gap to cross, you don't do it with two small steps," explains Andrew Hutton, the bank's head of investment management and group investment management.

As Putin's rule becomes more established, the political trend in Russia is firmly authoritarian and centralist. But that is not necessarily a barrier to liberal economic reforms.As Putin's rule becomes more established, the political trend in Russia is firmly authoritarian and centralist. But that is not necessarily a barrier to liberal economic reforms. Ben Aris reports.