Limited understanding of markets by key regulatory and political figures is a contributing factor to the European sovereign debt crisis, as financiers and government officers increasingly fail to communicate.

The reluctant decision by European governments to publish stress tests for their domestic banks might shed an unwelcome light on the illiquidity of many local sovereign debt markets.

The attack of the machines or flash crash in US stocks on May 6 highlighted serious problems in the one corner of the markets that is supposedly an oasis of liquidity and transparency. This does not augur well for plans by regulators to push fixed-income markets such as credit towards electronic trading and settlement.

As electronic trading is dragged blinking into the sunlight, more careful name choices for platforms and systems might be a good idea, if only from a public relations standpoint.

The SEC fraud suit against Goldman Sachs has shone a spotlight on the exploitation of the useful idiots at the heart of the credit crisis. Goldman must now hope for similar suits against rival dealers so that it can try to deploy the Murder on the Orient Express defence – the argument that they all did it. But whether or not Goldman is joined in the dock by some of its peers, the industry now faces the most serious threat yet to its derivatives-based trading revenues and a business model of adopting multiple roles in the modern capital markets.

The revolving door between Wall Street and Washington is not working to the industry’s specifications. Robert Khuzami, former general counsel for the Americas at Deutsche Bank, has been leading the charge against Goldman Sachs over alleged CDO fraud in his new role as head of enforcement at the SEC. And Gary Gensler, a former Goldman Sachs partner, has taken an unexpectedly tough line with the industry over derivatives reform in his position as head of the Commodity Futures Trading Commission. Bank heads could be forgiven for feeling that with friends like these, who needs enemies?

The SEC fraud suit against Goldman Sachs has shone a spotlight on the exploitation of the useful idiots at the heart of the credit crisis.

The Lehman bankruptcy examiner’s report provides a timely reminder of how difficult it is for outsiders to gauge the risk management culture at an investment bank.

Investment bankers frequently boast that their employer has a unique culture. There is a shared sense of purpose and responsibility for decision-making, normally allied with a common understanding of risk and the best way to pursue manageable growth. Often these cultural values are made explicit with a formal "One Firm" policy.

The focus on the role of Goldman Sachs in structuring currency and interest rate swaps for Greece a decade ago has highlighted the upside and downside of providing complex liability advice and trades to governments.

Goldman Sachs partner Addy Loudiadis could have been forgiven for hoping to have heard the last about her part in structuring currency and interest rate swaps for Greece.

It seems an odd time to devote resources to building an investment banking franchise.

The unexpected lurch towards tighter regulation by the Obama administration has focused an unwelcome spotlight for banks on the dirty secret of their sales and trading operations: exactly how much is made from proprietary risk-taking by business lines with a nominal client focus.

There is a near consensus that 2010 will be a banner year for commodities trading. Energy analysts are hard pressed to see anywhere for prices to go but up. TV ads urge householders to cash in their gold to exploit the boom. And banks of all types are scrambling to win a share of the commodities revenue that was once largely the preserve of investment banks led by Goldman Sachs and Morgan Stanley.

Two of the top-four bank commodity groups are run by women, unusually for the male-dominated world of sales and trading at investment banks.

Compensation could become a sore point if 2010 fails to turn into the FICC bonanza many bank heads seem to be expecting.

It’s the year that just keeps giving for fixed-income traders. But the growing intensity of the race to exploit this state-sponsored boom suggests that there will be significant disruption when the FICC festive season ends.

Protectionist business interests risk derailing Japan's merger reforms to allow foreign companies to make non-hostile acquisitions in the country. M&A adviser Nicholas Benes argues that meaningful change is essential if Japan is to raise its woeful levels of foreign investment.

Alistair Graham and Larry Byrne, who act for a UK executive facing extradition to the US over price-fixing claims, argue that the new extradition system between the countries is deeply flawed

UK junior market AIM could be hampered by tight interpretations of EU rules on what constitutes a public offer

EU stock exchanges are taking action to stop issuers deserting them because of cost increases caused by the impending Prospectus Directive.

Foreign companies are concerned about a requirement that they register with the SEC if they have more than 300 individual US shareholders. Buying back shares might not be the answer.

Disclosure rules are forcing issuers to consider listing outside the EU, reports Michael Evans. Switzerland's SWX sees an opportunity to win business from its European rivalsThe Swiss Exchange (SWX) has launched its first offensive in what promises to be a long battle to snatch Eurobond business away from London and Luxembourg. Last month, representatives of the exchange visited capital markets law firms in London in a bid to convince lawyers of the benefits to non-EU issuers of switching to SWX. The SWX sales pitch is based on new rules unveiled on November 15. These make a Swiss listing relatively easy at a time when Europe's transparency and prospectus directives will impose costly reporting requirements on companies listed in the EU.

The SEC's authority to reform the US funds sector is coming under fire — even from law firms. Legal action against the SEC is being expected in some quarters.

The UK's financial regulator will take a dim view of companies that respond in a legalistic way to its investigations, threatening exemplary sanctions against those that don't cooperate fully.

The Swiss stock exchange hopes to steal business from rivals in EU countries by offering favourable listing rules.

Have French efforts to create a national champion in the pharmaceuticals industry left its companies more vulnerable to hostile takeovers?

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

Banks and lawyers in the US face confusion over the tests used to determine their liability on securities fraud.

Has Silicon Valley finally got its groove back? Venture capital investment in start-up companies rose to $35 million in the third quarter, up 36% on the previous three months. M&A activity is also rising. And talk of a $20 billion initial public offering by Google is generating the kind of buzz last experienced in 1999.