Widespread speculation about the likely purchaser of Bank of America’s equity prime brokerage business has come to an end.

Having been hit by a series of defections in recent months, Deutsche Bank has acquired a new head for its Russian business.

BofA’s new take on a long-established form of capital-raising was quickly replicated by its peers.

THERE HAVE BEEN some significant winners and losers in this year’s Euromoney foreign exchange poll. Astonishingly, Deutsche Bank has further consolidated its position as the top dog of the foreign exchange market, increasing its overall share to 21.7% from 19.3% in 2007.

Osman Semerci, Merrill Lynch’s former global head of fixed income, currencies and commodities, and co-president of the EMEA global markets and investment banking business, has joined $1.7 billion alternatives group Duet as its chief executive. Duet Group, which started in 2002 with just $10 million in a single fund, now has 14 funds, and is looking to further expand its range of strategies, in addition to growing its private equity business.

US investment bank Merrill Lynch has created a new infrastructure equities index, giving investors convenient access to the projected infrastructure boom in Russia.

Dimitri Psyllidis, co-head of EMEA FICC at Merrill Lynch has left the firm. David Gu was announced as sole head of EMEA FICC.

Despite reporting its first annual loss in 2007 and forecasts of further credit write-downs in the first quarter, Merrill Lynch is getting out the chequebook for its Latin American business.

The latest bout of blood-letting at the bank may only tarnish its reputation further.

The CEO suites of Wall Street have their first vacancy sign since the world learnt what sub-prime means.

Chris Mandell has apparently left her role as head of currencies and local markets and head of sales for global rates, currencies and commodities (GRCC) at Bank of America (BofA). Sources say that she decided to quit after being asked to take what is described by some insiders as “one sideways step too many”.

The Merrill CEO had to go, but the firm he leaves is much stronger than the one he inherited.

Bank of America has carried out a "functional alignment" of its FX business to drive what it says is greater collaboration across its global rates, currencies and commodities businesses. These are managed overall by Richie Prager. As part of the alignment, Gerhard Seebacher has been named head of trading for all GRCC products. Chris Mandell continues as head of currencies and local markets and has also been named head of sales for GRCC, a newly created position.

When Stan O’Neal spoke at the Euromoney Forum in London in late June, concerns about the fallout from the sub-prime correction were at their height. In a wide-ranging interview with Euromoney’s editor, Clive Horwood, Merrill Lynch’s chairman and chief executive discussed the market’s reaction to sub-prime, and whether or not the contagion would spread.

The US bank has stuck to its strategy and reaped the rewards. Now it has the platform to move to the next level in both domestic and international banking.

In the July 2007 edition of Euromoney, Bank of America CEO Ken Lewis gave a rare in-depth interview. Lewis said: "We are not believers in the build it and they will come mantra. We need to look our shareholders in the eye". "In time, we want to be one of the top five investment banks in the world". More than 18 months ago Euromoney said: "Bank of America is at a tipping point. Ken Lewis is about to face his biggest challenge yet." Little did we know how great the challenge would be. Re-read the story here

The US firm manages to stay ahead of the competition by spearheading innovation, despite the fact that it also dominates the flow business.

Bank of America’s next step forward

Optimism that the launch of collateralized foreign exchange obligations (CFXO) would attract a new range of participants to the market (see Structured products: CFXOs bring in new investors, Euromoney June 2007) now looks well founded. Merrill Lynch says that it attracted more than €1 billion ($1.34 billion) for its recently launched CFXO, which is managed by Crédit Agricole Asset Management. "The deal went much better than we even expected," says Atanas Bostandjiev, managing director and head of structured rates and FX marketing, EMEA, at Merrill. "The roadshow in Europe alone raised the global target. Compared with CDOs that have been launched on non-traditional assets, this has been excellent."

Wall Street investment bankers were agog at the news. Could it really be that Jimmy Quigley, debt capital markets legend and icon of Merrill Lynch’s dominance of the primary bond markets in the 1990s, had become an accountant?

Merrill Lynch’s real estate team is looking decidedly thinner on the ground after a series of recent departures. CMBS head Nassar Hussain has left the bank along with John Bigley and Pascal Richard. They are understood to be heading off to different ventures: Hussain is rumoured to be setting up a Middle East-based property fund.

Hot off the press

Perhaps the biggest name to jump ship in the European debt syndicate world recently has been Marco Baldini. Baldini spent just under 12 years at Barclays Capital of which nearly 11 were on the debt syndicate desk, and he has now moved to Merrill Lynch.

Despite encouraging news from Bank of America, most US mortgage providers have so far remained aloof despite investor enthusiasm for covered bonds. Jethro Wookey reports.

Consolidation, fragmentation and segmentation

Merrill Lynch has appointed John Crompton as managing director and head of equity capital markets for Europe, the Middle East and Africa (EMEA).

Summary table of top banks, with quick links to more related content on euromoney.com

Big strategic acquisitions might be an exciting diversion for banks’ senior managers. But it is shareholders that pay for them.

Some things cannot be taught. Class, for example. You either have it or you don’t. What does “class” mean to you? To me, it implies doing the right thing; and there’s an element of humility. Financiers are wealthy but rarely classy.

* Harry Culham update: 6 February 2008