Any football supporter will tell you that the team is usually only as good as the person who runs it. The same applies to investment banking. The CEO sets the agenda for the entire firm. It is a highly pressurized role that will culminate in their removal if the team they manage fails to perform. And the performance that ultimately matters for bank CEOs is to deliver returns to shareholders.

Standard & Poor’s has downgraded Ecuador’s long-term foreign currency ratings to CCC from CCC+. S&P also changed the credit rating outlook to stable from positive. The moves follow repeated statements by Ecuador’s president, Rafael Correa, that the government would fail to make an interest payment on its debt due this month. Last month economy minister Ricardo Patino told investors that the government was considering repaying only 40% of its foreign debt. He added that he expected a debt-restructuring plan to emerge soon. Correa’s government, which came into power in January, believes much of Ecuador’s $11 billion-worth of foreign debt is illegitimate because it was borrowed by military dictatorships that ran the country in the past.

Jochen Andritzky’s book demonstrates the importance of analysing CDS prices alongside bond prices in assessing the likelihood of sovereign default and expected recovery values. Felix Salmon examines the evidence.

Arne Hassel has joined the $10 billion London-based currency and alternatives manager Millennium Global Investments as managing director of the funds of hedge funds business. Hassel was previously CIO of funds of hedge funds at Coronation Fund Managers, before which he was head of hedge fund strategies at GSAM in London.

Liability management can be a double-edged sword. Get it right and everyone showers you with plaudits about your relative sophistication as a borrower and how attentive you are to addressing investors’ wants and needs. Get it wrong, however, and your name is quickly mud and the world and his fund manager wife are soon griping about how naive you are and how difficult it will be for you to achieve your funding target for the year if you carry on in a such a cavalier, market-unfriendly manner.

Activist shareholders have a bad name. Helen Avery brought together a group of hedge funds to uncover the positive role that such investors can play.

Mergers and acquisitions are the hot topic in Tokyo as corporate Japan shifts into investment mode. And although Japan’s M&A market is flawed, structural changes are slowly under way and global bulge-bracket firms will be the ­ultimate winners. Chris Leahy reports.

Demand for mortgages and consumer loans from low-income borrowers will provide a big opportunity for private sector lenders, according to a new report by Merrill Lynch called The Merrill Lynch guide to emerging mortgage and consumer credit markets. The bank says currently government agencies provide a large chunk of this kind of finance. But in the long run demand will only be satisfied by building capital market instruments, such as residential mortgage-backed securities and mortgage covered bonds. The bank reckons Colombia has the strongest RMBS market in Latin America.

Two milestones reached in January are testament to the pace of economic change in China.

Hedge fund Cabezon Capital focuses on the currency and liquidity strategies of emerging market governments pursuing export-led growth. Helen Avery speaks to Michael Dooley, the fund’s co-founder and head of research.

OMX bids for Slovenian stock exchange.

With emerging markets as an asset class hotter than ever, it might be expected that capital flows to them would also be hitting all-time highs. Latin America, however, seems to have been left out of the party somewhat.

Deutsche Bank, JPMorgan and Goldman Sachs comprise the new three-firm bulge bracket in the debt markets. That’s what respondents to our three key customer polls in 2006 tell us.

RBC Capital Markets announced the completion of two of the first ever rouble-denominated bonds since the rouble became fully convertible.

BBA writes to UK Treasury over ‘informal actions of US officials’.

Deutsche Bank’s European securitization research notes the market’s impressive growth rate in Russia in 2006.

In Euromoney’s November 2006 issue we reported on Ritchie’s restructuring plan for its ailing multi-strategy fund. Doug Rothschild, Ritchie’s chief administration officer, explained how investors had agreed to have the assets split into two share classes: an equity class one with a 3.25 year lock-up, and a redeeming class that provided a schedule for the return of funds to redeeming investors over 2.5 years. As such, redemptions would be slowed, longer-term private-equity type investments could be made, and investors would then receive their money back, possibly with a return.

There are generally clear advance indications of ECB interest rate increases. However, the precise dimensions of change over the longer term are harder to predict, leaving market adjustments trailing.

Leading Russian investment bank Renaissance Capital has added yet another banker to its already impressive staff, which has extensive investment banking experience in emerging European capital markets.

There are sound reasons why volatility has fallen across asset classes. But a safe bet for 2007 is that it will rise again.

Asia... start your engines.

Peru has set up the equivalent of Fannie Mae, reflecting the growing importance of mortgages in the country.

At Euromoney’s Paris Forum held at the end of 2006, the chief executive of BNP Paribas, Baudouin Prot, outlined some of the challenges facing major financial institutions. Principal among these is the growth and globalization of the banking industry. The interview was conducted by Chris Garnett, Euromoney’s director of conferences. Read or listen to it here.

Mexico’s exchange calls into question the point of recent liability management trades.

China’s hot...

Nothing is more likely to cause instability than a long period of stability. And excessive growth of credit and liquidity is a clear warning sign of crashes to come, probably within the next year.

Mexican fixed-line operator Maxcom almost defaulted on its debt a few years ago. But in December the company successfully returned to the international capital markets, proving that the appetite for Latin American high-yield credits is as strong as ever. Chloe Hayward speaks to CFO José-Antonio Solbes about the company’s turnaround.

Japan is slow to adopt financial market innovations, and algorithmic trading is no exception.

Albania has something of an image problem abroad. What scant coverage the country has received in the international press in the past has almost universally been negative in tone, focusing on drugs-trafficking, Mafia shootings, banking scandals and political mismanagement. It’s hardly the ideal news recipe if you’re looking to attract much-needed investment to a country often dubbed the poor man of Europe.

The “marriage made in heaven” (as it has been described in the financial press) between yield-hungry Asian investors and perpetual bond-issuing Latin American companies turned hellish in May 2006.