Just last spring, Raiffeisen Zentralbank, or RZB, had virtually no profile in the capital-markets industry of eastern Europe; the bank was known mainly in its domestic market, Austria, where it is a high-street bank with 2,500 branches. Last year the London office of RZB took up only a few floors of a non-descript building on a tiny side street. But over the past few months, the bank has shaken off its sleepy origins and has started actively poaching staff from larger firms and aggressively expanding into sales, trading, research and, more recently, investment banking.

When the Republica Oriental del Uruguay sold a 10-year bond on the international debt markets in September 1996, officials at the Banco Central were pleased to note that the 160 basis point spread was tighter than some recent offerings from investment grade-rated sovereigns, strength-ening their belief that Uruguay was ready for an upgrade.

By mid-September, US companies had announced plans to buy back about $114 billion of their own shares, about two-thirds the amount announced in all of 1996, and one and a half times 1994's total, according to Securities Data. But while such buy-backs have been viewed as a bullish signal for the past few years, they are now increasingly viewed as little more than elaborate sleight of hand designed to con investors. If they've artificially boosted the stock market, as many now suggest, might the enormous overhang they are creating also trigger its fall?

Systematic traders and risk managers rely on tons of historical data to help predict probable gains and losses. So how will they predict the behaviour of the euro during its first few trading days, weeks, months? By David Shirreff.

Arguments over how to price a deal will never go away, even for frequent borrowers. Most have 15 or more investment banks chasing the mandates, offering the issuer all sorts of advice and inducements. A treasurer who chooses an aggressively priced deal might save his institution a few thousand dollars over 10 years and make himself look good to his bosses, but if it's too aggressive and investors don't buy it, could this harm his future issues? And if the deal is too generous, why should investors bother to buy paper issued later that might be more accurately priced?

I've just returned from Germany, visiting the great in government, bureaucracy, Bundesbank and the European Monetary Institute. I'm convinced the Bundesbank will raise interest rates by 25 basis points before the year-end and by around 200bp by the end of 1998.

Is the Asian currency crisis over?

For a while in the early 1990s, Vietnam looked set to make a late sprint to catch up with its much richer neighbours in south east Asia. A far-reaching programme of economic liberalization attracted a wave of foreign investment and unleashed strong economic growth. But in the past few years foreign interest has flagged and investment projects have frequently become bogged down in bureaucracy and corruption. With the latest industrial output figures showing the lowest growth rate in years, it is becoming clear that the country's underdeveloped financial markets are holding back the pace of economic growth.

Just as Wall Street bankers go back to work from their summer vacations, the latest financial thriller is hitting the bookstores.

Banca Popolare di Milano (BPM) has come up with an innovative bond linked to top names in the clothing, eyewear and accessories industries. The L20 billion ($11 million) self-led fashion-linked bond is based on an underlying basket of 12 international stocks ranging from Benetton, Bulgari and Gucci to Escada, Hermès, Luxottica and Louis Vuitton Moët Hennessy. The securities pay interest when the paper matures in two years' time: the holders will receive the appreciation between the value of the basket on payment date and its average price over the life of the bond.

Issuer: ITT Promedia

The legalistic stuff at the back of loan agreements is too dull for most bankers to bother about. But you need to know why it is there. By Christopher Stoakes.

The first time I come to Hong Kong I check myself into the Mandarin and go out to meet this promising young shipowner called CH Tung, I sell him on a new way of financing his fleet, and this is the original Junk Bond.

Issuer: SBC Glacier Finance Series 1997-2

Remember Allerdale, Waltham Forest, Hammersmith and Fulham? The failure of international banks almost a decade ago to force these UK local authorities to pay out on their swaps contracts and loan guarantees has held back the development of municipal finance in the UK. While municipal bond markets have grown up in many other European countries and even emerging markets, banks' sour memories have hampered the UK private finance initiative (PFI), designed to encourage private financing of large infrastructure projects, including new road building, since its official launch several years ago.

With Japan's financial deregulation gathering pace - and foreign players emerging as the clear winners - Japanese institutions have been slow to formulate defence strategies. Some see their salvation in growth areas such as investment banking and asset management. But as Jack Lowenstein reports, their real future may lie in linking up with outsiders. And foreign acquisition of Japanese firms may not be far off.

The recent volcanic eruptions on the Caribbean island of Montserrat have brought death to its inhabitants, destroyed several towns and villages, and forced the evacuation of over half the island's 11,000 population. But despite the turmoil, Royal Bank of Canada is not leaving - yet.

Canada's six largest banks dominate their home market, so it's hardly surprising they are looking abroad for growth opportunities. But their expansion strategies could hardly be more different: while Nova Scotia is buying up Latin American banks, CIBC is becoming a player on Wall Street and Toronto Dominion is cultivating a niche as a discount broker. But what would really allow Canadian banks to become serious global players would be if the government were to allow them to merge. Richard Blackwell reports.

Last month's announced merger of bulge-bracket firm Salomon Brothers with brokerage Smith Barney creates something bigger than Morgan Stanley Dean Witter. But the chairman of its parent, Travelers Group, may have overreached himself as he triggers another culture clash on Wall Street. By Michelle Celarier.

Issuer: Rheinische Hypothekenbank

Commerzbank used to be content pushing along as Germany's number-three bank. As local rivals merge and grow, this bank is too proud to downsize. In equities at least, it wants to be a global player. Laura Covill reports.

It seems to be Ugur Bayar's fate to be a civil servant. It's the third time in five years that the 33-year-old bachelor has quit his job in the private sector and moved back to his mother's house in Ankara to start working for the government. This is a rare phenomenon. There are droves of ex-bureaucrats in Istanbul who have left the privations of the civil service for fat salaries in the private sector; the reverse rarely happens. Ankara, a dull, characterless city whose only industry is politics, is easy to leave but notoriously difficult to return to.

MeesPierson never sat happily within ABN Amro, and nobody was surprised when the venerable Dutch merchant bank was put up for sale last year. Now new owner Fortis faces the challenge of accommodating the bank - and motivating its restless managers before the current trickle of departures turns into a flood. Antony Currie reports.

When one of Scandinavia's major international companies wants to launch a bond or share issue it turns to a global player like Morgan Stanley - not to a local bank. Most Nordic banks concentrate on smaller companies and retail banking. But their ambitions are growing, and with privatization gathering pace and a single European capital market looming, the region's banking sector is consolidating rapidly. Robert Minto reports on the race to become Scandinavia's first truly regional bank.

Slovenia is the wealthiest country to have emerged from communist rule, but is it losing its way? Exports are flagging, industry is becoming politicized and the stock market is shaky. Even the country's successful banking reforms have ground to a halt. Gavin Gray reports on the dangers ahead.

When high-flying Hong Kong investment bank Peregrine decided to set up a joint venture in South Korea six years ago, its partner must have seemed an excellent choice. A medium-sized conglomerate, the Dongbang group was a reasonably well focused business, the leading maker of cooking oil, a producer of food materials and owner of a restaurant chain. Inexperienced in investment banking, it was not likely to interfere in the day-to-day running of the business.

In both roles, Shashenkov will be exploiting his talents as a western-educated Russian who can talk to foreign and Russian bankers and investors on their own terms. Such Russians are in big demand by the country's banks.

For all the talk of designing exotic derivatives for hedge funds, the most useful service a bank can provide is often good old-fashioned credit. Even so hedge funds are prompting banks to reorganize since their demands straddle many departments. The funds' importance as customers is starting to outstrip that of institutional investors, and the banks are dancing to their tune. Andy Webb reports.

First former Wall Street banker Jim Rogers did it. Now a Danish fund manager based in Hong Kong is to repeat his motorbike odyssey around the world, the result of which was the book Investment Biker.

Take a trip to Moscow and you might come away with the impression that AKA Bank is one of Russia's largest financial institutions. A huge advert for the bank bears down in passport control outside Sheremetyevo airport and also appears on the back of cloakroom tags at the Bolshoi theatre, accompanied by the slogan "the customer is king at our bank" - a concept new to anyone accustomed to the Byzantine ways of Russian banks.