The State of California is suing State Street Corporation, alleging that the Boston-based bank overcharged two of its high-profile pension funds on securities-related FX transactions. While some are claiming that the allegations involving pension funds Calpers and Calsters are the biggest story in FX for some time, the really big issue is why it has taken what are supposedly professionally run funds so long – up to eight years, according to CNBC – to realize that they might not have been filled at a realistic FX rate.

The financial markets bounce is unsustainable. Demand will fall and corporate costs will rise as artificial stimulus is withdrawn and fiscal retrenchment kicks in. Expect an almighty splat as the markets drop.

Talks under way about payment arrears; Agreement with holdouts also under consideration

Ivanhoe claims GDP could get 30% lift; Deal expected to be worth $4 billion

The New York FX Committee will appoint Jeff Feig, global head of G10 FX at Citi, as its chairman when Richie Mahoney steps down in early 2010. Mahoney, head of BoNY Mellon’s global markets and capital markets group, has served on the committee since 1994, so Feig has a lot to live up to.

A way to cope with forward premia risk; Increased reluctance to take on counterparty risk

Investors show signs of nerves; But perps bond market gets boost

Spacs convert to special-purpose Reits as time runs out to invest; Hedge funds profit from their demise

Hong Kong flotation to mark Russian first; Debt restructuring key to planned IPO

Troika Dialog deal strengthens Standard Bank’s emerging markets presence; Troika Dialog gets better access to Standard’s balance sheet and links to China’s ICBC

Alliance Bank’s steering committee agrees to terms of restructuring; Government to avoid assuming all liabilities

Mubadala, the Abu Dhabi state-owned company established to diversify the emirate’s economy, plans to become a frequent borrower in the international capital markets, says a senior official.

Banks under scrutiny over lending growth; Central bank praised for its supervision

Takes lead in increasing interest rates; Australian dollar strengthens

Bank shares sold off after rights-issue news; Banks need to get good advice on deals

Amias Berman kicks off with PE deal; Primus buys into insurance

"Life is fragile," Jamie Forese, Citi’s head of markets, mused. We were sitting in his office at Citi’s New York investment banking headquarters. It was the eighth anniversary of the September 11 World Trade Center bombings. I thought of Jamie’s words when the 61-year-old legendary banker Bruce Wasserstein, chairman and chief executive of Lazard Ltd, died unexpectedly in mid-October. Wasserstein, like Larry Fink, the chief executive of BlackRock, was a Credit Suisse First Boston refugee who went on to found his own firm, become a billionaire and leave an indelible mark on the financial firmament.

Uncertainty is growing over the scope and scale of restructuring plans to be imposed by the EU Competition Commission on European banks that have been kept alive by state aid.

The European high-yield market may finally have come of age.

Banks now busy negotiating debt-for-equity swaps in their distressed investments could actually be making their problems worse.

Economic conditions may appear to be easing, but the region’s biggest challenges still lie ahead.

Wall Street bankers think the capital market boom is the new normal. We’re not so sure.

How much does the Kingdom care about foreign investment?

China sceptics think a dangerous asset bubble could be building.

Trading is bringing in the money for Wall Street, but is it artificial?; Fed might not unwind programmes next year

State-supported banks are being forced to sell; New entrant RHJ International will build on Kleinwort Benson

The banking system is still on life support; A new fund might protect against renewed panic

The Swiss bank needs to make a real commitment to the key Latin market, or give up the ghost.

M&A worse than volumes reveal, fees down; 2010 seen to be better if equity markets stay up

BNP Paribas leads the way on state repayment; Are other banks looking to do too much, too soon?