Euromoney asked eight leading chief executives what impact the credit crunch has had on their banks and what they think are the problems and advantages of being a local bank in a time of global crisis.

Government intervention in financial markets goes against the grain of any US administration. However, it appears preventing closure of the mortgage finance markets is more important than ideology.

It could be the perfect storm – financial, macroeconomic and geopolitical risk are all on the rise. Risk is both where you anticipate it, and where you least expect it.

"Our long-term view remains – we will eventually see 1.60 for cable and parity for EUR/GBP" -Paul Day, Mig Investments

India moved a step closer to liberalizing its foreign exchange market with the launch of rupee currency futures trading on the National Stock Exchange on August 29. Initial activity was brisk, with about 70,000 contracts changing hands in the first session. The NSE contracts are extremely small by international standards – they have a notional value of just $1,000 – and would appear to be very much aimed at attracting retail participation. Perhaps not surprisingly, early trading was dominated by banks and large corporations.

Senior bankers in China remain confident that the economy will continue to provide a favourable backdrop for the banking industry, despite a slowdown in growth. However, some concede that a more complex economic environment in China and abroad will bring greater challenges to the banking system, especially in risk management.

As the equity market continues to struggle in Brazil, the local debt market is growing in importance. The challenge is to find enough bankers to fill the demand.

The tables are starting to turn in the Brazilian banking market – for the first time foreign-owned banks have become acquisition targets for locals Itaú and Bradesco, valued at more than $60 billion each, which now dwarf the purchasing power of several of the international banks in the aftermath of the sub-prime crisis.

Hedge fund administrator Fulcrum, has merged with the hedge fund services arm of Butterfield Bank, an award-winning Bermudian bank.

With a huge pipeline of covered bond issuance planned for the next few months, much is being asked of investors. There might not be enough of them to go around.

The greenback revival, driven by ECB recognition that the eurozone is faltering, will be sustained by the narrowing of the US current account deficit, the fall in the oil price and the US pursuit of a soft monetary policy.

Gulf firms raised a record $15.76 billion in rights issues from July 2007 to June 2008, a 242% increase on the previous 12 months. In the first six months of 2008, rights issues in the Gulf Cooperation Council states raised $11.9 billion from shareholders, according to research from UK law firm Trowers & Hamlins.

Barely a day goes by without a new craze for so-called frontier markets in Africa being mentioned somewhere. But are the returns worth the fuss?

Australian hedge fund Basis Capital is to pay $23 million to investors in two of its funds. The investors put their money into the funds in June 2007, the month investments were frozen because of liquidity problems. Because the money had technically not been invested until September, the investors were able to claim a full refund. Other investors in the struggling funds now being advised by Blackstone will suffer losses.

The reintroduction of mandatory market-making in Pfandbriefe has not gone smoothly.

The blow-up of corporate trades in China might lead to regulatory restraints on transparent, run-of-the-mill derivatives use.

US leaders might ponder the lessons of Venezuela and Iran.

Despite a new round of fundraising for distressed ABS, a market floor is not necessarily in sight.

Japan’s agencies have long been dependable if staid issuers, with their government backing and tendency towards regular benchmark issuance providing a steady source of bonds yielding 15 to 20 basis points more than Japanese treasuries. Now they face change: in a series of reforms aimed at reducing government involvement in public finance, Development Bank of Japan (DBJ) is to be privatized and Japan Bank for International Cooperation (JBIC) is merging with a group of other government finance institutions to form a new firm called Japan Finance Corp. Their paths will diverge dramatically: JBIC will continue to enjoy government backing and is thinking only of tinkering with its borrowing routines by offering more benchmarks. DBJ is striking out on its own as an investment bank, and aiming rather high if management are to be believed. DBJ, a regular benchmark yen issuer in the international markets since 1960, is to begin to be privatized in October and will gradually reduce issuance of government guaranteed bonds from the present ¥190 billion ($1.9 billion) to a projected maximum of ¥160 billion in financial year 2008.

India remains an attractive investment opportunity for private equity funds despite a weakened economic outlook for the country and inflation at a 13-year high. Caroline Williams, a private equity partner at law firm Walkers in the Cayman Islands, says India is seeing increased interest from offshore money that is to be put to work in the national infrastructure programme over the next five to seven years. India is beating China in attracting private equity funds says Walkers. Private equity investment has risen consistently from $2.03 billion in 2005 to $17.14 billion in 2007. And the deals are getting bigger. In 2007, 48 deals of more than $100 million were closed compared with 11 in 2006, according to the firm. A further estimated $500 billion is needed in the next five years to meet infrastructure development plans for India.

Asia-focused hedge funds received $530 million in new assets over the second quarter, down from $1 billion in net inflows the previous quarter, according to HFRI. Its Asia hedge fund index has lost almost 14% this year. Recent research by Singapore fund of hedge funds GFIA suggests that performance is better among indigenous managers, and that London and New York will continue to lose market share to Asia strategies.

A study by quant fund AQR says hedge fund replicators are not necessarily what investors want. The new indices launched by banks such as Goldman Sachs, Credit Suisse and Merrill Lynch are too highly correlated to other asset classes within an investor’s portfolio to add much value, says the study. Furthermore, their inability to capture tactical shifts in hedge fund exposures because of lack of public information means that replications might not keep up with hedge fund moves.

CLS has hired Roger Rutherford as its head of product management. Rutherford, who reports to Rachael Hoey, director of business development, joins from Icap’s EBS unit where he held several roles, including leading the EMEA sales team; he was also a key member of the team that launched EBS’s prime brokerage offering and more recently was spearheading the introduction of NDF trading on to the EBS platform. Many years ago, he was a voice broker at Marshalls.

Faced with growing evidence that issuers were gaming the scheme, the European Central Bank has finally tweaked the collateral requirements for its repo liquidity programme. Haircuts for ABS and unsecured bank bonds have been increased, the former up from 2% to 12%. This brings the scheme into line with Bank of England and Federal Reserve rules – but in reality makes ECB rules more stringent as the maturities on offer are shorter. The ECB has also tightened the close-link rules so that ABS collateral for which the seller is also swap counterparty is disallowed. Seller liquidity support of more than 20% has also been axed. The rules are likely to have an impact on smaller banks that have relied on ECB liquidity but analysts at Deutsche Bank calculate that the incremental cost to banks following the haircut change is 50 basis points. This means that the ECB window is still the most cost-efficient funding channel available to banks if maturity is not a consideration. "This change alone is unlikely to compel many banks to return to the securitization capital markets," conclude the DB analysts.

MBIA has agreed to reinsure a $184 billion portion of FGIC’s municipal bond book in a deal that reduces risk exposure for the latter and improves the capital position of the former. The solid municipal credits will also improve the risk profile of MBIA’s book. Under the deal, if a credit event is triggered on FGIC, protection buyers have a claim on MBIA for these assets – but there is still some legal uncertainty as to how this process would actually work. In a separate development, FGIC has paid a $200 million settlement to Calyon to commute CDS written on IKB’s Rhineland conduit. FGIC is suing IKB for fraud in relation to the now defunct vehicle.

The rapid expansion of samurai bonds (yen-denominated deals sold by foreign borrowers into Japan) puts them firmly in the coveted list of credit-crunch beneficiaries. Borrowers of all types facing the increasingly expensive prospect of issuing in their illiquid domestic markets are finding an attractively cheap alternative in Tokyo. The bonds are also attractive for individual investors in Japan, offering higher yields than domestic bonds or the interest paid on savings accounts.

But exchange still looks like a political tool.

Today’s long-term rise in agricultural commodity prices is different from previous episodic spikes. Higher prices are having knock-on effects on companies in the sector, as well as on farmers and the poor, and causing a re-evaluation of business models. Peter Koh reports.

"More business is done here in the sauna after a good round of golf than is ever done in meeting rooms," says a senior manager at a top investment bank in Seoul, perhaps a touch wistfully, when Euromoney’s correspondent asks for advice on networking on a recent visit to Korea.

Iran’s banks have had their access to international liquidity curtailed by sanctions imposed by the US. This photo, of a Bank Melli cashpoint, suggests its management may have gone a little too far in protecting their deposit base. Either that, or perhaps the marketing department got the wrong end of the stick in a drive to attract high net-worth individuals?