September 2005

Cover Story

How Europe's governments have enronized their debts

How Europe's governments have enronized their debts

Europe's government bond markets are built on a lie. Ministries of finance have adopted corporate financing techniques to give a false impression of their true debt levels. Regulators appear unwilling or unable to do anything about it. Investors and taxpayers ought to know. Mark Brown and Alex Chambers reveal all.

Central banking

The case against Alan Greenspan

As Alan Greenspan nears retirement, it is time to assess his legacy. Does the Fed chairman deserve his reputation as one of the great central bankers? Frank Partnoy argues that he is in fact the beneficiary of virtuous circumstances, has rarely been in control of events, and has often made the wrong call – notably in his attitude towards credit derivatives.

Euromoney awards

European banking

Meet your new European bank: the financial cornershop

Public-sector banks in Europe have hit on a new and potentially profitable idea. They're trying to turn themselves into localised versions of the universal banking model. Who are some of the successful early movers? And we look at how Europe's cooperative banks are teaming up in debt capital markets.

Unico banks seek new ways to work together

The Unico network of cooperative banks is nearly 30 years old. As it approaches middle age, can it persuade European debt issuers that the concept of a Unico deal that reaches both big and small investors across the continent is more than a neat branding ploy?

Is there a danger of the Icelandic banking market overheating?

The growth of Iceland's banks – now centred on three main groups, profiled on the following pages – is one of the success stories of the past decade. The pace of development has led to concerns that such growth might be problematic and unsustainable. But the banks themselves are confident they are well placed for the future.

Securities market

There's no hiding from Mifid

There's no hiding from Mifid

Mifid promises to shake up EU financial markets in a way that will make Big Bang look like a gentle nudge. To have any hope of meeting the implementation deadline of April 2007 investment banks might need to set aside as much as $12 million each in their 2006 budgets. Peter Koh examines the fallout


CMBS Debate: Getting real estate financing right

Funding real estate development and portfolios is changing. For some the bank market still makes sense; for others the unsecured bond markets. But the burgeoning CMBS market is becoming the vehicle of choice for many. Here's why.

Emerging markets

Why Iraq's debt deal makes sense

Iraq's finance minister, Ali Allawi, argues that debt relief with its official and commercial creditors is crucial to restoring stability to the country

The realities of emerging market CDS

As restructuring rather than default becomes the norm for credit events in the emerging markets, it is time for those involved in the market to reappraise the effects of distressed situations on credit default swap prices, argue Manmohan Singh and Jochen Andritzky

A new paradigm or a bubble set to burst?

Improved fundamentals have undoubtedly fuelled the emerging-market debt boom. But that's by no means the whole story. Excess liquidity might be forcing values unjustifiably high, and hedge fund and credit derivative strategies are vulnerable to an overdue yield-curve readjustment.

Country risk

Country risk Sep 2005

Country risk Sep 2005

Country risk index: Most countries have better access to capital than ever before and sovereign credit ratings have been on the rise for the past three years. But an increasingly tense geopolitical environment has led to marked decline in this year's country risk ratings. Research and analysis by Paul Pedzinski.

Middle East

Ian Hay Davison, Dealing with Dubai: The regulator's tale

Ian Hay Davison, Dealing with Dubai: The regulator's tale

In 2002 the Dubai authorities announced the appointment of a distinguished chairman to its financial regulator that would give credibility to the country's attempts to establish itself as the leading Arab financial centre. Just two years later he was fired. Now, for the first time, Ian Hay Davison gives a first-hand account of the events that led to his dismissal. In the following linked article, the current chief executive of the DFSA gives his response

Qatar builds a project finance powerhouse

Qatar has become a centre of project finance expertise as the government pursues big industrial and infrastructure projects. Skills have spread from foreign banks to local institutions and are being used in the whole region.

Dubai looks to mop up liquidity

Companies from Egypt to India and from Turkey to South Africa are hoping that the opening of the Dubai International Financial Exchange, set for the end of September, will open the doors to a vast well of unemployed petrodollars.

Libya: Towards a liberalized economy

Governor of the Central Bank of Libya Ahmed Menesi talks to Kate Luxford about plans to prepare Libya's economy for a more competitive environment after privatization

Lebanon's path to growth and stability

Jihad Azour, Lebanon's finance minister, was director of UN Development Programme and World Bank projects at the ministry before his cabinet appointment in July 2005. He talks to Kate Luxford about Lebanon's economic priorities

Lebanese bank mergers look set for revival

Riad Salameh has been governor of Lebanon's central bank, Banque du Liban, since 1993. He talks to Kate Luxford about bank consolidation and the need for capital market growth

Iran's new guard rethinks investment strategy

As a new president takes office in Iran and deadlock hits talks with the European Union over Tehran's controversial nuclear programme, investors are pondering whether they should enter an economy that might soon be subject to sanctions.

A new breed of borrower

Iranian shipping company NITC is a rarity: it's one of the few non-oil and gas companies in the Islamic Republic seeking funds in the international markets.

Syria opens for Lebanese banking

As Lebanese banks flush with liquidity devise regional expansion strategies, four of them have won licences to open affiliates in Syria's nascent privately owned banking sector.

Central & Eastern Europe

East or west, why local currency is best

Emerging-market and convergence investors have long since stopped buying hard-currency debt from the new European countries after their spreads converged with EU government levels, but the region's local-currency debt is attracting ever more inflows. Kathryn Wells reports on where the best opportunities lie

Is the world big enough for Gazprom?

The imminent liberalization of Gazprom share ownership rules will introduce the world's biggest energy company to the world's biggest investors. But is Gazprom ready for the world, or the world for Gazprom?

Russia's profitable summer break

Eastern European equity had a summer of love, as stockmarkets from Budapest to Istanbul hit all-time highs. Russia, last year's chronic underachiever, has been the best performer of all.

Kazakhstan's bankers' banker

Grigorii Marchenko, chief executive of Halyk Bank and former governor of Kazakhstan's central bank, talks to Euromoney about bank capitalization, the development of consumer banking products, Kazakhstan's economic policy and the country's regional role.

C&EE: Engineering a debt management agency

Dragos Neacsu, a former civil engineer and latterly investment banker, has taken on the challenge of overcoming the many shortcomings of Romania's debt strategy from the foundations up.

Time to come good on his promises

Ukraine's president Viktor Yushchenko has had a roller-coaster 12 months. He was poisoned, faced rigged election results and was then swept to power on the back of a peaceful revolution that split Ukrainian opinion in two. Now the time has come to show whether he can deliver on his pledges. Euromoney quizzed Yushchenko on how he intends to do this

UniCredit advances – but must stay on its toes

Central and eastern Europe's leading institutions have been quick to praise UniCredit's acquisition of HVB, which creates the region's biggest bank. But, they warn, it had better stay on its toes, as rivals will look to profit from any loss of focus that the alliance brings.

The great Russian private-equity gamble

It's difficult to make money in Russian private equity. Consequently, many of the world's biggest funds have steered clear. For those that have taken the plunge, the results are mixed. Some report returns far higher than those on equities. Others have had no luck and have packed up and left.

Real estate

Emerging markets 200


Debunking myths

This month, Euromoney seeks to debunk two of the great myths of the international financial markets.

Front End

Market leaders

Activism rules, OK!

What are shareholders to do? Sit back and allow the board to make obvious mistakes and lose them money? Or use their rights as shareholders to make the board take notice and maybe make some money? Dysfunctional corporate management has had too easy a ride from institutional investors.

China's fancy footwork

Far from bowing to international pressure, China's renminbi revaluation shows it is firmly in control of its own destiny

What price stability?

As Kazakhstan prepares for an election, foreign institutions should remember that autocrats are of little benefit to investments in the long run

Debt markets

Structured credit

Foreign Exchange

FX Options: Options go mainstream

As customers become increasingly sophisticated in trading FX options, banks and other providers are enhancing electronic offerings to tap new markets

Corporate finance

M&A: Are corporate buyers back?

Strategic buyers are getting increasingly bullish about M&A opportunities. So far this year, though, they haven't stolen any of the thunder of financial sponsors

Equity markets

Fund management

Emerging Europe

Asia Pacific

Dirty politics, despairing country

Deep in political crisis, president Gloria Macapagal Arroyo is ill prepared to address the Philippines' critical financial problems. She seems to be running out of time. And so does her country.

Ramos aims to reinvent the republic

Such is the dearth of credible leadership in the Philippines that Filipinos, if they could, would probably vote former president Ramos back in by a landslide. If the ex-general pulls off his plans for constitutional change, that might just happen.

New management makes over Malaysia Inc

A flurry of activity marked the first year of new management at Khazanah, Malaysia's state-owned investment arm. Tough decisions have been made and tougher rules set. But the job is far from complete and success may prove elusive. Chris Leahy reports from Kuala Lumpur

Tackling Tenaga

Malaysia's local electricity supplier is just one of the government-linked companies on Khazanah's books. And, like most of them, it has plenty of problems to deal with.

Latin America

What next for Argentina?

Argentina has rebounded impressively from the 2002 crisis, but it still faces enormous risks and challenges. Sudip Roy spoke to Argentina's top economic policy-makers, including the economy minister, finance secretary and central bank president, about how they plan to take their country forward.

Chávez reveals his master plan

Venezuela's president, Hugo Chávez, wants to build his influence in Latin America through the creation of a regional debt market. But emerging-market analysts are unimpressed.

Middle East & Africa

Against the tide

An end to German stagnation?

News of an election is already perking up the Germany economy. If a centre-right coalition wins, as seems likely, expect yet more improvement

Book review

Plotting the future: review of Time and Money

Studying the birth chart of the US shows planetary patterns coinciding with upheavals and depressions in the country's history – and in his new book, Robert Gover predicts a decade of depression ahead. Helen Avery looks at this alternative approach.


It's time for positive action at Ground Zero

Exactly four years on from the September 11 attacks, there's been little construction activity to encourage banks to move back into Lower Manhattan. Goldman Sachs's decision to build a new headquarters on the site might be crucial