In the name of transparency, liquidity and, paradoxically, fair pricing for investors, the current draft of the EU's revised Investment Services Directive threatens to undermine investment banks' internalized securities trading. Ian Mackenzie reports.

The culture of corporate bonding has taken hold in the UK. Off-sites, golf tournaments, tank-driving weekends, group hugs - they're all about learning to love your co-workers, and in doing so make your office a more harmonious, and profitable, place.

Foreign investors with their eyes fixed on Russia's continued powerful economic growth are shrugging off the recent arrest of Mikhail Khodorkovsky. The CEO of oil giant Yukos and Russia's richest man, he was pulled in on October 25 by Kalashnikov-toting officers of the FSB (federal securities services). This might have briefly unsettled the stock market, but foreign companies selling soap and coffee to increasingly affluent Russian consumers believe their businesses will be unaffected.

Permal, part of French group Worms & Cie, announced last month that it had launched its first Islamic hedge fund.

New financial legislation and infrastructure in Dubai and Saudi Arabia give them the opportunity to challenge Bahrain's position as the Middle East's prime financial centre. Nigel Dudley reports.

Chairman and founder, Garner International

Since the Madrid meeting of the Basle Committee on Banking Supervision in October, a new realization has dawned on the senior managements of banks around Europe and the rest of the world. The Basle II accord will go ahead - having looked in doubt at various times this year - and the time is fast approaching when banks must move beyond arguments over complexity, pro-cyclicality and inappropriate incentives. They must start implementation.

Most bankers would have said the stakes were high enough at the Rugby World Cup final between bitter rivals Australia and England in Sydney. But that was not the case with Aussie investment bank Macquarie. It upped the ante by publishing research confidently predicting a home victory, entitled "Rugby World Cup - quant style - Why the Wallabies will win".

Issuer: Commerzbank

Led by imaginative sovereign issues, Latin American bond markets made a remarkable recovery this year. Corporates are now joining the bandwagon as sovereign yields come down. Felix Salmon reports.

As the demand for Latin bonds strengthened over 2003, so did the supply, at least in terms of the number of investment banks competing for mandates. After years of a shrinking market as a result of banks pulling out or merging, the number of players is increasing again, as a consequence of European commercial banks deciding that debt capital markets activity is a good complement to lending operations.

With Greece scheduled to hold general elections next spring, the conservative New Democracy party currently has a solid lead in the polls. The party's shadow finance minister, George Alogoskoufis (pictured), says Greece should change its economic policy mix to place greater emphasis on fiscal consolidation and the liberalization of certain markets to boost competitiveness and growth prospects. "The real picture of the Greek economy is not reflected in the GDP growth numbers. Special factors such as the preparations for the 2004 Olympic Games and the speeding up of older projects have boosted GDP," Alogoskoufis tells Euromoney. "The budget deficit is widening, the public debt exceeds 100% of GDP, inflation is among the highest in the EU, and the economy's international competitiveness is low, as evidenced by the large current account deficit and the rankings of international organizations. The public sector is still characterized by bureaucracy and corruption."

When it comes to debt, the British are the kings of binge. British debtors now owe the equivalent of UK GDP and their debts are much more sensitive to interest rate rises than US consumers'. Two-thirds of US borrowing is at fixed rates; almost 90% of secured UK household debt - mostly mortgages - is at variable rates. And UK rates have begun to rise.

Issuer: Junto de Comunidades de Castilla-La Mancha

In a bid to moderate dollar inflows, the Indian government took steps early last month to discourage Indian companies and financial institutions from borrowing in foreign currency. The new rules stipulate a lower all-in cost for commercial bank loans and restrict the purpose for which loans of over $50 million can be raised.

"We've got three dollars to the pound," used to be one of the songs favoured by England's Barmy Army cricket fans on their tours to Australia. The slur on Australia's sliding currency, sometimes dubbed the Aussie peso, was one of the few ways they could get back at their hosts, who regularly thrashed them on the field.

The US economy is growing at over 8% a year. Jobs are returning, industrial production is improving and households are still spending. Everybody expects this business cycle to be like those before and they've lapped up stocks in the US and Europe, in anticipation.

Will Germany finally start to generate true-sale securitizations next year, with all that means for the German economy?

By Brian Mooyart

The article entitled “The World’s Best Banks” published in the July issue mentioned Sheikh Khalid bin Mahfouz in the context of his stewardship of NCB in the 1990s. He has asked us to clarify a couple of issues. Sheikh Khalid wishes to make clear that he was not fined by the US regulators for his part in the collapse of BCCI. Sheikh Khalid settled the matter without any admission of guilt in relation to the charges brought against him. Sheikh Khalid also wishes it to be made clear that he was not ousted from NCB following the collapse of BCCI. He states that he chose to stand down in order to devote his time to defending himself against the BCCI charges. Euromoney wishes to further clarify that while new management then set provisions for possible loan losses in 1999 at 10 times higher than any previous year, no dramatic increase in actual loan losses has since occurred.

A growth rate rivalling China's has thrown up compelling corporate stories from India. Analysts polled by Euromoney favoured its companies for their investor-friendly qualities Kathryn Tully reports; research by Andrew Newby, Paul Pedzinski and David Skalinder.

As the controversy over the proposed constitution for the EU rages, it's hard to know if former UK finance minister Kenneth Clarke's most recent contribution will alarm Europhiles or Europhobes most.

Investment bank bonuses are set to reach up to $5 million this year, up 50% from 2002, according to a survey by headhunters Armstrong International.

Hopes that fiscal consolidation would begin paying off for Lebanon in 2004 were dashed by the draft budget approved by the cabinet in late October.

Mortgage-backed deals continued to dominate European structured finance in 2003 but deals funding complex infrastructure projects began to make a big splash, with monoline insurers taking on an indispensable role. Mark Brown reports.

One exchange's successful capture of liquidity from another is a rare event. So why are both the London Stock Exchange and the Deutsche Börse attempting to take Dutch equities business away from Euronext? Peter Koh reports

Deutsche Bank is set to offer tailor-made corporate governance research on FTSE 350 companies before the end of the first quarter of 2004. Aimed at fund managers, it offers systematic analysis of corporate governance issues at top companies, providing further context for the financial numbers.

Headlines exposing torrid tales of corporate miscreants and tough talk by governments and regulators about imposing new standards have kept the issue of corporate governance bubbling over in recent times. Investors suspect companies are paying no more than lip service. However, a few Asian companies have been quietly setting their own standards - and reaping significant gains. Chris Leahy reports.

George Soros, billionaire speculator and philanthropist, was in a bad mood when he addressed the US Russian Investment Conference in Boston last month. On November 6, "40 hooded goons" raided the Moscow office of his Open Russia philanthropic venture, and took away boxes of files.

From banking to bongos. Until 2001, Jay MacDonald was a nickel trader, most recently for Standard Bank in London. But 18 months ago he ditched his day job and six-figure salary to become a professional bongo drum player.