Having been heavily overweight on Russia last year, many emerging-market equity investors are now scaling back their positions. Some investors are making a fundamental reassessment of Russian equity risk.

The mini bank crisis Russians faced in the summer has underscored the urgent need for bank sector reform and the creation of a system that can respond to the credit needs of businesses and individuals.

Deflation is on the way, summoning up a long and dreary financial winter. But it should be preceded by a burst of autumn sunshine

New tools such as credit default swaps and index products have changed the ground rules of hedge fund activity in emerging markets. They are paying off now but will sophisticated pricing and technology be able to cope with the next emerging-market debt crisis?

The appointment of former deputy central bank governor Jammaz Al-Suhaimi as chairman of Saudi Arabia's Capital Markets Authority looks set to accelerate the liberalization and broadening of the kingdom's financial markets.

The Shariah-compliant debt market has grown rapidly, with interest from issuers and investors outside as well as inside the Muslim world. The next development is likely to be more corporate issues using Islamic structures.

The prospect of next month's European Commission decision on EU membership for Romania has concentrated the minds of the country's politicians and bankers. A flurry of reforms have been accompanied by an acceleration of privatization to get the country into shape for a 2007 accession target.

Argentina is facing an invidious situation. It has strong motives to resolve the default on its foreign debt but its offer could be strangled at birth. Many creditors seem unwilling to accept it. The proposed bond exchange, the world's largest ever, is just the beginning of the road back to international acceptance.

Lack of volatility and narrow spreads have driven investors to seek out yield in the structured credit market. New products built on transparent, non-proprietary credit derivative indices have fed this demand but participants worry that not all investors have a clear idea of what they are getting into.

Iran's economic liberalization programme has shown impressive results. But the victory of conservative forces in the latest elections threatens further progress. Meanwhile the country's banks are incapable of funding its corporations, which are turning instead to the capital markets.

The EU's decision in December on Turkey's bid for membership will have dramatic effects on the country's economic development. But even if the formal accession process begins, major reforms will still have to be undertaken.

Russia's economy is roaring up the growth curve but dependence on oil revenues, insufficient diversification into other activities and a growing gap between the well-off and the poor give cause for concern.

Low interest rates and improvements in financial stability and management in large parts of Latin America are putting banks on the path to increased lending capacity as demand for credit increases.

To date, securitization in eastern Europe has been a very occasional affair. Turkey has seen a few future-flow transactions, Hungary has a relatively developed domestic mortgage bond market, but you can count the number of other transactions on the fingers of two hands. However, the market should pick up this year.

European and US equity markets have mirrored each other for years but macro trends could force a decoupling over the next two years. ABN Amro strategists see several factors paving the way for this. The first is that productivity growth in the US and Europe has passed an inflection point. The US has experienced two years of strong productivity growth, but the rate is unlikely to be sustainable. European productivity still has room for improvement.

The new coalition government led by Indian prime minister Manmohan Singh will kick off privatization sales with a billion-dollar initial public offering in September.

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Wait long enough and anything comes back into fashion. Even flares. Now it's high-yield cash collateralized bonds, or CDOs.

A slowdown in the growth of China's asset pool is not deterring new entrants among fund managers.

There has been an unseasonal tension on some of Spain's more exclusive beaches over the past month. August is usually a time for the great and the good of industry to leave the stresses of the cities behind them and unwind by the sea. But for the chairmen of some of the biggest companies, the holidays were spoiled by the knowledge that in the autumn they will be fighting for their jobs.

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South Africa has built stable macroeconomic foundations since the overthrow of apartheid but its potential as a regional leader is still hampered by corporate rigidities, untapped talent reflected in high unemployment, an Aids epidemic and a failure to attract inward investment.

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Citigroup's trading on European government bond platform MTS on August 2 has provoked a lot of hyperbole. Citigroup sold e11 billion of European government bonds on MTS and bought e4 billion back a few minutes later at a lower price, making a profit and causing losses at other primary dealers. According to one financial newspaper, Citigroup has "systematically targeted other market makers' mandatory price quotes", which has "shocked rivals". Consequently, the eurozone government bond market has been "thrown into turmoil" and apparently national debt agencies have been forced into a period of "intense soul searching".

Senior bankers who quit their jobs on the pretext of pursuing new interests often quickly emerge in a similar role. Not so Manfred Schepers, who left UBS last June after 17 years. He said he was leaving to consider new banking roles but that his first priority was a good break. He meant it.

Germany breached the EU's budget deficit limit of 3% of GDP over the first six months of this year and will almost certainly break the terms of the European stability pact that underpins the euro for the third year in a row. In fact, the government managed to run a 4% budget deficit over the first half of this year, slightly higher than the 3.9% for the end of 2003, federal statistics office Destatis revealed last month.

There's an obvious appeal in linking your brand with the Olympic ethos of excellence and achievement, as the likes of John Hancock, Visa and Greece's own Alpha Bank did at last month's Athens Games. Other sponsorships are harder to work out. Standard Bank of South Africa, for example, is sponsoring a dead whale. Misty is, or was, a southern right whale (Eubalaena australis) that came off second best in a collision with a ship and washed up near Cape Town. As Standard Bank says in a grisly press release: ?Decomposition set in and her rotting 70-ton body became a source of controversy. It was decided to implode the carcass but [residents] persuaded the powers to allow them to remove the rotting flesh to preserve the skeleton.

Analysts are growing increasingly concerned about rising problem loans advanced to SMEs by Korean banks. The banks' track record inspires little confidence. They lent unwisely to the conglomerates in the late 1990s and then hit problems with consumer credit cards. Have the Korean banks learnt their lesson or is a third bad debt crisis looming?

You're a populist left-wing politician in South America. Your country's elite doesn't like you, and Wall Street is scathing. Your reputation could do with a bit of help. What do you do? Why, take out an advertisement in the New York press, of course. The trend started in July, when an advert appeared in the New York Times. "Argentina," it blared: "A responsible country, a responsible proposal". A list of the great and the good followed, attesting to Argentina's "sincere and realistic proposal to creditors" (see Argentina's creditors brace for lowball offer). U2's Bono, Mikhail Gorbachev and actors Emma Thompson and Viggo Mortensen were prominent.

In the lull between the fundamentals of European companies improving and their expanding or acquiring rivals, there's been a dearth of new credit issuance. Hence the interest investors have taken in liability management deals. Investors claim to see good returns from these, but this is by no means guaranteed.