Off the record is a collection of unattributed quotes from the market.

"It will not happen and if it happens ... we will deliver the appropriate answer to a problem which will not occur"

The demise of AIG has inflicted an identity crisis on the insurance industry. But insurers face exposure to distressed assets, accounting and valuation issues and a potential shortage of capital. Sounds familiar? Helen Avery reports on how insurers believe they will avoid the same fate as the banks.

AIU, the rebranded general and commercial insurance division of AIG, tops every global category in Euromoney’s insurance poll. Holding on to customers and staff in the wake of AIG’s collapse into the arms of the US taxpayer has been a tough challenge. AIU chief executive Nicholas Walsh explains to Peter Lee the latest plans to create a separate identity for the division and an eventual IPO.

Zurich reported net income of $3 billion for 2008. More impressive was its return of 1% on its investments. Helen Avery spoke to Martin Senn, CIO.

Axa’s Gerald Harlin tells Helen Avery about the benefits of balance.

A select group of emerging market equity fund managers is aiming to do something different – outperform developed markets in a prolonged global downturn. Staying clear of the crowd will be crucial to success. Chloe Hayward profiles seven leading investors and asks where they will make money in 2009.

In a period of financial crisis corporates are particularly concerned about avoiding risk, but are also keen to get their cash working at a time when credit is hard to raise. Competition between top providers is fierce, while there are new opportunities for the second tier. Laurence Neville reports.

Senior and junior noteholders are at war, navigating a complex legal web to extract some value from Europe’s unravelling CMBS market. Louise Bowman explains the limited options available to the servicers stuck in the middle.

Custodians have become one of the few safe havens of the financial markets. If they can manage securities lending without putting assets at risk, their power and influence among clients is set to grow. Helen Avery reports.

Governments on both sides of the Atlantic have announced ambitious infrastructure spending commitments. But they will have to negotiate a much-changed bank lending market to realize their plans. Louise Bowman reports.

Mexican cement company Cemex has initiated talks with its core banks to renegotiate the majority of its outstanding debt: $14.5 billion in syndicated and bilateral obligations.

Italy’s UniCredit made a €4 billion net profit in 2008, down 38% on the previous year but not as bad as some analysts feared. However, the bank, which is the biggest lender in central and eastern Europe, also recorded an almost 50% jump in bad debt provisions to €3.7 billion. The bank plans to sell up to €4 billion of hybrid debt to the Italian and Austrian governments, as well as private investors, to lift its core tier 1 capital ratio to 7.2% from 6.5%.

Latvia’s Parex bank, which was rescued by the government in December after it hit liquidity problems, has agreed a loan restructuring agreement with foreign creditors. The bank is restructuring two loan facilities worth €775 million in total as part of a state-funded agreement. One loan, for €500 million, was due in June and the €275 million facility was due in February. The new terms means that the bank will stagger repayments to nearly 60 different banks over three years. The first tranche, for €232.5 million, was due last month. Parex is only paying a small restructuring fee but its benchmark borrowing costs will rise more than five times. The European Bank for Reconstruction and Development is to take a €100 million stake in Parex too.

The marketing campaign for the first-ever initial public offering from Armenia has been launched despite the fact that the country recently had to abandon attempts to support its currency, the dram, which depreciated by 25% in March.

Saudi British Bank, which is part of HSBC, has appointed a new managing director and chairman. Richard Groves will replace John Coverdale as managing director. Coverdale is heading to Hong Kong to become HSBC’s global co-head of commercial banking.

Brazil’s federal power holding group, Electrobras, has approved its 2009-12 strategic plan for R$30.2 billion ($13.2 billion) of investments.

In two deals in as many days, Korean firms reopened Asia’s capital-raising markets. International issuance thus far this year has generally been limited to triple-A rated banks and financial institutions but deals from steelmaker Posco and SK Telecom reopened the straight debt and convertible bond markets respectively. SK was first out on March 19 with a $300 million convertible bond that caused something of a stir in the market for the way in which lead bookrunner Nomura behaved – see the separate story for full details. Posco followed on March 20 with a $700 million five-year bond that was the first dollar deal for an Asian company in eight months. Posco had initially marketed the deal with a guidance yield of 9.5% but in a piece of good fortune for the issuer an announcement by the US Federal Reserve that it would buy back some $300 billion in treasuries triggered a recovery in global bond prices that let Posco’s deal price at 8.95%.

With many of its banks among the worst hit by the financial crisis in the Middle East, Bahrain now looks as if it might be a nucleus of GCC financial services consolidation. As elsewhere in the Gulf, there are too many banks in Bahrain considering the size of its economy. Bahrain’s economy is relatively precarious because it has smaller foreign reserves than its neighbours and the government has made large increases in expenditure in recent years. The island is also home to many banks with a regional focus.

Standard Chartered has arranged and underwritten the first ever RMBS transaction for a state-owned entity in the Philippines. The Ps2.1 billion ($43.6 million) deal for the country’s National Home Mortgage Finance Corp comes in the form of notes with an average duration of five years priced at 8.4437%. There are two classes: senior notes aimed at institutional investors, and subordinated notes that the issuing entity will retain. Margarito Teves, secretary of the country’s department of finance, said that the bonds opened the door for further similar deals. Who said mortgage-backed securities were dead?

China Life is the world’s biggest life assurer and China’s largest institutional investor. Its president talks to Sudip Roy about the challenges the company faces.

The Venezuelan government has started to delay payments to contractors and oil service companies, indicating that the collapse in oil prices is finally taking its toll on president Hugo Chávez’s wallet.

China’s banks are lending a hand to support the government’s efforts to stimulate the economy. But do they risk losing an arm and a leg if the economy fails to grow as expected? Sudip Roy reports from Beijing.

Mansour Al Maiman, secretary general of Saudi Arabia’s Public Investment Fund, tells Dominic O’Neill how his institution is adapting to the changing needs of his country.

Turkey is looking to take advantage of the fact that the country’s banking sector remains relatively well capitalized to achieve its challenging overseas funding requirement in 2009. Memduh Aslan Akcay, director general at the department of the treasury in Ankara, says that this year the country is looking to raise at least $3 billion in the international bond markets. This is likely to be the highest total required by any sovereign in the emerging Europe region. In 2008, Turkey had an indicated overseas funding target of $5.5 billion but the market turmoil caused by the fallout from the global credit crunch and associated economic slowdown meant that it was only able to raise $4 billion. So far this year the sovereign has raised $1 billion through a dollar Eurobond and the US currency along with euro will probably account for the bulk of this year’s issuance. "The US dollar and the euro were the main funding currencies so far and will remain as the core markets for us in the future," says Akcay. "On the other hand, we are ready to tap new currencies if and when we believe the conditions are appropriate for a transaction."

The country restructured its financial system after the Asian crisis, and so it might have lessons to offer the world. But its recent self-inflicted economic woes are urgent and less worthy of emulation. Eric Ellis reports from Bangkok.

People wanted to believe ponzmeister Madoff because they crave stable, compounding returns. After his spectacular fall from grace, calls to shine a light on the opaque world of hedge funds will be irresistible.

Chinese banks need to grow new income sources from fee-based services such as private banking, cash management, trade finance and investment banking. But they must balance a need to grab market share with their desire to avoid creating another banking bubble. Lawrence White reports from Beijing and Shanghai.

Agustin Carstens, the Mexican finance minister, has confirmed that Citi does not have to sell its Mexican unit, Banamex, following the US government’s investment in the US bank.

Fixed-income markets stand at a crossroads. The traditional model is broken. A new breed of debt advisory and trading boutiques believe they hold the key to the future. Some of the biggest names in the bond market are jumping on the bandwagon. Alex Chambers examines whether this is the day of the independents.