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Consolidation among investment banks has had a big impact on the equity capital markets league table results in 2008 and will do so again in 2009.

The UK Treasury is understood to be considering the establishment of a conduit-style fund that would source investment directly from institutional investors such as pension funds and insurance companies to fund its infrastructure investment programme. The UK government would own the conduit and take the first-loss risk in the vehicle. Management of the conduit would be outsourced to a third party – insiders suggest that one of the monoline guarantors is being considered. The conduit could be launched in the next three to six months.

Key numbers from the equity capital markets in 2008 include $257.4 billion, the value of equity raised by financial sector issuers, accounting for 41% of total ECM volume of $634.4 billion. That’s up from just 11%, the financial sector’s share of new issues in 2007. In 2007, total global ECM volume was $943.7 billion

According to analysts at JPMorgan, there is little certainty among all the doom, gloom and despondency in the financial markets. But although few people can confidently predict the outcome of the global financial crisis, JPMorgan believes it can be relatively sure that 2009 will be a year of less leverage and more regulation.

News that China experienced a severe foreign exchange outflow in the fourth quarter of 2008 came as a major surprise to most analysts and left them searching explanations. According to an initial report written by Stephen Green, Standard Chartered’s head of research for China, the unexplained outflows could have been as much as $240 billion, a figure he described as “a very big, very scary number”.

This year is not set to be one of economic recovery – the financial assets that are cheap are cheap for a very good reason, and it’s not a propitious one.

The huge fraud underlines the crucial role of hedge fund administrators and independent prime brokers. An SEC that’s more au fait with hedge funds would also help. Neil Wilson reports.

Latin American sovereigns are on track to meet their 2009 financing needs after an impressive start to the year, according to senior debt bankers. Barclays Capital reckons that 34% of this year’s estimated total of $19 billion of emerging market sovereign issuance has already been successfully placed despite fears that the US and Europe would crowd them out. Latin American corporates, in contrast, are facing more difficult and expensive financing.

The Commodity Futures Trading Commission’s requirement to increase the amount of net adjusted capital needed to operate in the retail FX market to $15 million on January 17 has led ODL Securities to decide it is no longer worth operating in the US. Sources close to ODL say that having pulled out from the west, it will now refocus on the east.

Retail FX provider FXCM has launched a new platform, Active Trader, which it says is aimed at the higher end of the market. The platform has greater depth of book transparency and, unlike most other retail offerings, charges commission, determined by volumes, to trade. FXCM says this enables it to pass on tighter spreads from its liquidity providers. Accounts will require minimum deposits of $25,000 or a history of active trading.

The decision of the Federal Reserve to turn on the printing presses will result in a re-run of the 1970s. For investors the best safe havens are hard assets, including gold – Keynes’ “barbarous relic”, writes Lincoln Rathnam.

VTB, Russia’s second-biggest bank, announced worse-than-expected results for the third quarter after making a loss of $369 million following the doubling of its provisioning levels. Analysts at Nomura reckon that the biggest challenge facing VTB is that the equity capital of the bank declined by $1.5 billion in the third quarter alone. The bank’s chief financial officer has said that it needs to raise tier 1 capital and is hopeful that its minority shareholders will come to the rescue. In the third quarter, the bank’s capital adequacy ratio fell to 14% from 15.8%, although it’s still well above the Russian minimum level of 10%. The bank’s tier 1 ratio dropped to 12.7% from 14.4% in the second quarter.