Even Kazakh bank employees are joining investors in a flight to quality away from the sector. BTA Bank and Kazkommertzbank are overwhelmed by foreign debt too eagerly lent out at home and only Halyk is in good shape. Although there are still a few potential foreign buyers nosing around Kazakh financial assets, Raiffeisen for one has decided that its ambitions in the country will be best fulfilled through a greenfield operation. Elliot Wilson reports.

Chris Lees has been officially unveiled as the new head of financial institutions group origination in debt capital markets at Citi. He reports to Eirik Winter, head of DCM EMEA. Lees previously spent much of his career at Citi in the European syndicate team where he worked in the high-grade sector. His appointment fills a gap in the origination wall chart at Citi since Alan Patterson moved to run its capital markets product group in March 2007.

Broadly, hedge funds began to feel the full effects of market turmoil in the second half of 2008, although pockets of outperformance persist. Neil Wilson identifies the strategies likely to do best in a transformed market.

It might have been the most turbulent month in memory for global stock markets but equity capital raisings did not grind to a halt. In fact, September has seen a spate of equity raisings from banks despite, or rather because of, the fact that they are at the centre of the market’s turbulence.

UBS heads the Dealogic league table for investment banking fees earned between January and September this year. The Swiss bank, which was awarded the title of best investment bank in Asia in Euromoney’s Awards for Excellence 2008, took a 5% market share with $323 million in fees during the nine-month period. Citi and Goldman Sachs were second and third respectively.

The CDS market is trying to withstand the strain of three almost simultaneous counterparty defaults.

For so long seen as a banking backwater, cash management’s time has come. Revenues are high-margin, stable and growing. Products such as liquidity management will only grow in importance. And, with the huge client bases involved for the biggest players, it’s a gateway into a lot of other business. Laurence Neville reports.

Freddie Mac is seeking to reassure holders of its debt that the preferred stock purchase agreement announced by US Treasury secretary Henry Paulson will protect them, "regardless of who wins the elections".

Data provider Markit announced at the end of September that it was planning to offer free access to its daily CDS pricing data to non-clients for a limited time. It also announced that buy-side accounts that wanted to confirm index trades would be given free access to its RED (reference entity database) system – again for a limited time. This largesse follows Markit’s decision earlier this year to offer free access to RED for buy-siders that only trade lightly in the CDS market. The moves will be welcomed by the smaller, second-tier institutions involved in the CDS market that have struggled to get access to information following the credit events at Fannie Mae, Freddie Mac, Lehman Brothers and WaMu.

The financial crisis has finally taken its toll on the money markets.

The relaunch of FX futures by Ice finally provides the CME with some proper competition.

The flamboyant stage presence and forthright views of Kotaro Tamura are becoming something of an annual highlight at Euromoney’s Japan Capital Markets Congress, and this year the LDP senator in charge of the sovereign wealth fund committee surpassed himself during an onstage interview that at times reduced a packed auditorium to helpless, if somewhat nervous, laughter.

The failure of the US House of Representatives to pass the Emergency Economic Stabilization Act of 2008 at its first reading on September 29 came despite the entreaties of the Securities Industry and Financial Markets Association to its members to call their congressmen before noon that day to explain to them why the legislation must pass.

On September 29 the Dow Jones Industrial Average experienced its most severe one-day decline in history. Of the S&P index’s 500 names, just one enjoyed a share price rise:

"I remember going into the Fed for meetings on the LTCM rescue plan. At one end of the table there was Jimmy Cayne, at the other Dick Fuld. Now the table is a lot smaller and the faces are not so familiar"

Have the big Japanese banks been over-cautious about buying stakes in troubled western peers?

The Spanish central bank prevented its financial institutions from investing heavily in the US sub-prime related securities. But Spain’s mid-tier banks are heavily exposed to a local property sector in crisis. Can they ride out the downturn? Peter Koh reports.

Indian bank suffers from loss of confidence as crisis spreads beyond the US and Europe.

African borrowers and international lenders need to be judicious in their approach to funding on the back of new energy discoveries.

The rapid and decisive intervention of European national authorities to prop up vulnerable banks might well limit the extent of European banks’ funding problems.

Analysts at JPMorgan suggest that prime money market funds, which had $2 trillion of assets under management in early September and are a leading provider of short-term liquidity to the banking system, suffered between $350 billion and $400 billion of redemptions after the Prime Reserve fund broke the buck following losses on its $385 million holdings of Lehman commercial paper.

The outcry against and restrictions on short-selling of financials stocks were unjustified and ill-advised and will have a deleterious impact.

As the region’s stock markets tumble and the international bond market shows no sign of opening, Latin American companies in need of cash are turning to plan B. "The loan market is still open in Brazil. There is also securitization. At the moment there is a plan B beyond the international bond market that will work for many Latin companies, especially for those in Brazil," Dan Vallimarescu, head of debt capital markets at Santander, told Euromoney just days after Lehman Brothers’ collapse. "Several issuers are getting a bank deal done quietly," says Chris Gilfond, joint head of Latin American debt at Citi. "People are also staying local and/or regional. For example, in Mexico and Peru the local debt capital markets business has been doing very well."

Colombia’s financial institutions continue to be in good shape. They expect record profits for 2008, despite the global turmoil. For the first seven months of 2008, the Colombian banking system reported a net profit of $1.43 billion, a 30.9% increase on the same period in 2007. "Last year was a record year for Citi Colombia in terms of profit and growth, but we expect to close this year with even better profit growth rates," says Francisco Aristeguieta, country head of Citi Colombia and head of the Andean region for Citi.

Bans on short sales, of naked shorting, and variations thereof were the order of the day in the second half of September as countries around the world attempted to stop stock markets falling.

International market access not yet certain.

Hugo Chávez, the president of Venezuela, ordered the US ambassador, Patrick Duddy, to leave the country last month. Chávez accused the Bush administration of planning a coup to overthrow him. Alleged conspirators have been detained. The Venezuelan president also recalled his envoy in Washington. Chávez said: "When there is a new government in the US, we’ll send an ambassador." These moves came shortly after the US government expelled the Bolivian ambassador after the Bolivians sent the US ambassador home. Chávez is a close ally of Bolivia’s president, Evo Morales. Both are antagonists of president George W Bush.

It was not only US investment banks such as Lehman Brothers and Merrill Lynch that found themselves in dire trouble in September. In the middle of the month, Russia’s KIT Finance found itself unable to meet repo obligations and had to hurriedly find a strategic buyer to prevent itself following Lehman’s fate. According to market sources, KIT Finance failed to settle repo obligations worth about Rb6 billion to Rb8 billion ($153 million to $230 million) In the end the company was rescued by Leader Asset Management, the pension fund arm of Russian energy company Gazprom.

The US economy is far more resilient than some commentators think. The present crisis also creates an opportunity for the Treasury to help itself and many pension funds.

Short of a radical restructuring of the banking sector, the US government bailout will prompt a market rally. However the longer-term effects will be deleterious.