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

Bureau de change claims liberalization of country’s regulations.

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 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.

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

Deutsche Bank has appointed Tiina Lee as head of European financial institutions capital origination. It is a new role at the bank that combines capital origination for debt and equity capital markets. The rationale is to take the bank’s alignment of the capital markets businesses in debt and equity to the next level, says Deutsche Bank. The present crisis, with banks, especially, in dire need of capital makes this type of approach from intermediaries increasingly important.

The BarclayHedge CTA Index ended July up 7.08% year to date, outperforming the aggregate hedge fund index by more than 10%. The Barclay hedge fund index, however, returned –4.45% up to the end of July. Returns such as these are encouraging investors to allocate to CTAs away from other strategies, say managers.

It is a sign of the times that, as investment banks in the UK and US downsize, those in the Arab world are doing the opposite.

The Eurobond market has existed for 45 years and its infrastructure reflects that. Bondholder trustees are gearing up to change one aspect that should improve their ability to obtain bondholder agreements. The present system – if it can be called a system – requires bondholders to receive 21 days’ notice of a meeting, which might or might not be quorate. If it is not quorate, another 14 days must elapse before another meeting can take place. The method through which bondholders are notified is equally antiquated. Investors are informed via newspaper adverts or through clearing agents.

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

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.

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.

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.

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.

The growing trade links between Russia and Serbia are likely to lead to a greater Russian presence in the Balkan country’s banking sector. That is the view of Alexei Sytnikov, vice-president of Bank of Moscow, Russia’s fifth-largest banking group by assets, which has established a wholly owned subsidiary in the Serbian capital Belgrade with an initial investment of €15 million. "We believe that the probability of other Russian players entering the Serbian market is very high," says Sytnikov, who is responsible for Bank of Moscow’s international banks. He adds that all the prerequisites for Russian banks, most likely from among the top 30 players, are in place for them to look to set up subsidiaries in Serbia – strong economic growth, a relatively low level of competition in the financial services sector and a growing Russian business presence.

Commodity prices will need to go higher again to prompt consumer and producer actions that bring them down.

But exchange still looks like a political tool.

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.

David Puth, the former head of FX and commodities at JPMorgan, has resurfaced after nearly two years out of the market. He has been appointed to the new position of head of investment research, securities finance and trading activities for State Street. He will report to Jay Hooley, president and chief operating officer of the Boston-based bank and will sit on the company’s operating group. Puth spent many years at what was originally Chemical Bank, going through several mergers and takeovers to end up at JPMorgan. After he left the bank in November 2006, he founded risk management and advisory group Eriska; he also joined Icap’s board as a non-executive director in November 2007.

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.

"It is not reasonable that any director can truly independently understand and monitor the full range of risks and complexities in today's highly sophisticated hedge fund" -Don Seymour, DMS Management

Third rights issue in a row for UK bank is shunned.

Citi

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

Some 190 IPOs seeking to raise $33.1 billion in capital have been postponed or withdrawn across the world so far this year, according to Dealogic.

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.

The European retail structured products market could be more than twice the size previously thought, according to Greenwich Associates.

The Chicago Mercantile Exchange has pushed through a contentious $7.7 billion acquisition of the New York Mercantile Exchange following months of negotiations. The CME was already the largest derivatives exchange in the world but the combined group, with pro forma 2007 annual revenue of $2.7 billion and average trading volume of approximately 14.2 million contracts a day in the first two quarters of 2008, will now control some 98% of trading in US futures and exchange-traded options. "As a united company we are well positioned for a new phase of growth, innovation and product development that will benefit our customers, shareholders and market users around the world," commented CME Group executive chairman Terry Duffy.

Continuing problems are forcing firms to reconsider market timing, the balance between public and private funding and the importance of neglected sources such as retail and corporate deposits. Six specialists debate the issues.