New firms target middle-market clients via strategic alliances; Private banks and family offices seen as possible rich vein

The news that HSBC’s chief executive, Michael Geoghegan, will move to Hong Kong has been greeted as further proof of the importance of Asia to the world’s top banking franchises.

A flurry of announcements during September heralds the end of an era in US banking. The banks themselves will hope it also presages a new, calmer period for their own institutions and the financial markets.

Barclays’ decision last month to move $12.3 billion of credit market assets to a Cayman Islands-registered fund prompted a frenzy of interest, combining as it did the twin bogeymen of toxic assets and off-balance-sheet vehicles. Barclays chief executive John Varley describes the deal as a further step in its "efforts to manage down the quantum and volatility of our credit market exposures" – already reduced by 30% in the first half of 2009. But it seems to be driven far more by concern about the monoline guarantors that wrapped many of these securities rather than the assets themselves. The transaction involves the sale of $2.3 billion of US RMBS, $1.8 billion of whole loans and $8.2 billion of assets wrapped with monoline guarantees to a fund, Protium Finance LP. Protium is a medicine frequently used to treat heartburn and acid reflux – not the most promising indicator of the desirability of the portfolio.

Gordon Brown’s government has no clear strategy for dealing with the budget deficit. Nor does its likely successor, the Conservatives led by David Cameron.

Governments and the broader public sector are increasingly seeking the sort of service improvements that can draw on cash management specialists’ expertise. Laurence Neville reports.

Investment bankers have always had a reputation for innovation – perhaps one they want to downplay right now. But a tour of the leading capital markets houses on Wall Street, almost a year to the day after the collapse of Lehman Brothers, gave the impression that they had learnt a new skill: the ability to bend time.

US venture focuses on private sector deals; Two-way trade growing

Antonio Acosta, the co-president of Banco del Pichincha, the largest bank in Ecuador, is confident 2009 will be a good year for the bank. He tells Euromoney why he is so positive about prospects.

Convertibles are attractive but illiquid; Investors are desperate for new issues

Citi has hired Rodney Tsang, previously Merrill Lynch’s head of China private-sector coverage, as co-head of China investment banking. Tsang will report to Farhan Faruqui, head of Asia Pacific global banking, who says of the hire: "The non-SOE [state-owned enterprise] sector in China has been growing for the past few years, and it’s an area we’re continuing to invest resources in. Rodney’s hire is an important incremental step in that direction, not only because he has good relationships and a lot of credibility with clients but because his track record in sectors including general industry, consumer and real estate complements the expertise of our existing team very well."

Two former JPMorgan bankers have launched a hedge fund that invests in fixed-income instruments in Russia, Kazakhstan and Ukraine.

UBS appears to be once again expanding its FX business with a series of senior appointments. Chris Vogelgesang, who spent 13 years at Merrill Lynch in senior roles before taking a break from the industry, has joined as global co-head of FX. Vogelgesang, who will be based in Zurich and report to Dimitri Psyllidis, shares the role with Singapore-based Arie Adler, who continues as head of FICC, Asia ex-Japan. Electronic trading pioneer Simon Wilson-Taylor, who left his role as head of State Street’s Global Link division in January, has also joined the bank as managing director and global head of e-commerce. He reports to Fabian Shey and is based in Stamford, Connecticut. UBS has also poached Andy Durrant from the CME in the new role of head of e-marketing in Europe. He will be based in London and report to Julian Wantling, co-head of FICC distribution, EMEA, as well as to Simon Wilson-Taylor.

Regional and multi-regional cash management banks have a chance to expand their markets and force global providers to rethink what they offer. Will they seize their opportunity? Laurence Neville reports.

Credit-quality and profit-growth troubles; Subsidiary in Syria to undertake IPO

A new ‘currency’ was launched in early September, when the WDX Organization used its synthetic Wocu – world currency unit – to trade on the Bordeaux Wine Exchange. The symbolic transaction will, WDX hopes, lead to swift acceptance and use of the Wocu as an international global unit of account. Ostensibly, the Wocu is little different from other basket products offered by numerous banks. Where it perhaps differs from bank offerings is in its independence. WDX has established an institute to ensure its integrity and it hopes that its proven low volatility – it has been back-tested over 10 years – will help to increase its chances of acceptance.

Policymakers like to talk up the dollar. But an orderly decline of the greenback would be no bad thing.

Morgan Stanley’s incoming CEO explains strategy; Mack and Chammah take new responsibilities

SW Asset Management, a new fixed-income fund, is demonstrating its enthusiasm for emerging market firms by investing in their debt and exploring the credit default swap market. Dominic O’Neill reports.

Daiwa, Nikko split from commercial partners; Kirin/Suntory shows corporate Japan’s pragmatism

Along with its peers Russia’s Alfa Bank has been battered and bruised by the financial and economic crisis. Its president, Petr Aven, tells Sudip Roy how the bank is battening down the hatches.

Merckle may have committed suicide because his empire was floundering but if I were a senior manager of a bank that is still in receipt of funds from the Troubled Asset Relief Program (Tarp), I might feel a little suicidal myself. In late September, I read a document enticingly entitled: ‘Practical considerations for implementing a luxury expenditures policy’, produced by Navigant Consulting. I don’t think I have laughed so much since details of the refurbishment of former Merrill CEO John Thain’s office surfaced.

Bank of England deputy governor Paul Tucker understands bankers’ fear of excessive regulation, but he’s not easing up. He insists banks should improve the quality of their capital and sees no role for subordinated debt. He wants strong banks to blow the whistle on the weak and to know that, in future, the shareholders of survivors will pick up the tab for bailing out the system. Peter Lee reports.

The spectacular rally in the US high-yield market this year has spilled over to Europe, raising the tantalizing prospect that, after several false starts, this asset class could finally establish itself. Louise Bowman reports.

I congratulate Morgan Stanley’s board for having made a decision rather than tiptoeing around the succession story until it became the elephant in the room. But there will be challenges ahead.

Italian insurers suffered badly from the Lehman bankruptcy thanks to investments in structured notes. The result is a regulatory shake-up to fundamentally change the way structured products are sold and distributed. John Ferry reports.

A year after acquiring Lehman Brothers’ Asian and European businesses, Nomura says it is halfway to building a global investment bank. Few people outside the firm think it will succeed. To some, it is already the ‘other Lehman takeover’. But Nomura’s leaders are determined to win the battle. Lawrence White and Helen Avery report.

In December 2008, I wrote a piece about Barclays, criticizing the expensive £7 billion capital-raising from Middle East investors and the decision to purchase Lehman’s US broker-dealer last September when the outlook for investment banking was at its most opaque. The article elicited howls of outrage from Barclays’ supporters. One indignant reader snorted: “I am encouraged by your criticism of Barclays’ management.”

Bankers like to think of themselves as entrepreneurs and when the leveraged finance market died many specialists were reborn as restructuring professionals.