Banks in Arab countries enjoyed much better results in 2003, especially during the second half. In 2002 earnings fell on the back of weakness in global investment markets, tight margins, and higher provisions. Net profit bounced back in 2003, rising by over 15% for the top 100 Arab banks.

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.

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.

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.

Investors ask tough questions these days about companies' ability to honour their commitments. After all, no-one wants to fall victim to the next corporate scandal. But Toys “R” Us shareholders and bondholders are safe, aren't they? Surely official “spokesanimal” Geoffrey the Giraffe and chums won't let them down.

Sandy Nairn loves a good challenge. After 10 years at Templeton Investment Management he took on the task of reviving Scottish Widows Investment Partnership, Lloyds TSB's languishing Edinburgh-based investment business in November 2000.

Slovakia boasts the fastest growth rate in central and eastern Europe as it turns from regional laggard to leader. It has boosted growth, controlled government spending and attracted FDI with a tax policy some of its larger neighbours dislike. They won't intimidate finance minister Ivan Miklos.

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.

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 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.

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.

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.

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

A well-executed privatization programme, carefully directed investment in education, valuable trade agreements and astute management of debt and inflation have underscored the growing health of the Jordanian economy, symbolized by its graduation from IMF programmes.

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.

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.

It's late on a Thursday night and the party cognoscenti are headed for one of Asia's slickest nightspots. From the exterior, f.bar, a bunker-like building with an unpromising squat black façade is guarded by serious-looking security personnel clad head to toe in matching black.

Following a period of sustained economic growth, the Caribbean is faced with a new challenge. Recent developments in international legislation might reduce capital inflows and put more pressure on the region's financial sector.

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?

Google's decision to use an auction for its IPO sprang from a desire to get what it regarded as a fair price, avoid post-issue upsets and offer fair investor access. Did it succeed in these goals and might it have done better had it shown more respect to its bankers?

Iraq and Argentina's debt problems will dominate this month's IMF/World Bank meetings, with the size of their liabilities casting doubt on the international financial system's ability to cope.

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.

No-one disputes that China's growth rate needed reining in. While investors worry over the possible consequences of a sharp slowdown, most economists believe that, contrary to global historical precedent, the Chinese authorities might have pulled off the trick of a relatively painless cool-down. But serious structural flaws in the economy remain and make China a perilous place to invest.

Bulgaria cleared an important hurdle when it finally approved the sale of mobile phone company BTC to a consortium led by Advent International in February, in one of the region's largest leveraged buy-outs. Financing for the deal finally closed in June. Gyuri Karady of Baring Private Equity Partners says: ?It tested the legal framework in Bulgaria, and it looks like the rule of law prevailed, which is a triumph for Bulgaria.? Progress on the deal was one of the factors that helped the country obtain an investment-grade rating later in the year.

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

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By Camilla Palladino

www.breakingviews.com

www.breakingviews.com