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If all the buzz that came my way was true, I don’t think there would be any profitable outfit in FX. Over the past week I have heard that one retail platform has missed a margin call with one of its banks, another lost all the money in a managed fund it was running and a major bank has just lost $1 billion and wiped out all its profits for the year. All possibly true, but then again, all probably not.

Oh, how recently it seems I was writing about the likelihood of coordinated FX intervention to prop up the dollar. It still seems that intervention is being considered, although the market has yet to consider it a real threat.

Word reaches me that work has started in earnest on the integration of Merrill Lynch’s trading operations into Bank of America. Sources suggest this will be completed by Christmas.

Part 1

The International Securities Exchange (ISE) has entered an agreement to list its FX options on the New York Stock Exchange’s Arca Options platform. “We are very excited that, in partnership with NYSE Arca, we are extending the reach of FX options to a wider range of market participants,” says Kris Monaco, director of new product development at ISE.

Among the 94 new partners announced by Goldman Sachs are Lora Price in New York and Kevin Connors in London, who both have something to do with FX. I got in touch with Goldman and asked: “Can you also let me know what they actually do for their money?” Turns out that Connors is co-head of FX sales, EMEA and Price is head of corporate sales, North America.

In the September issue of Euromoney, in an article about Turkey entitled It’s about the journey, not the destination, we wrongly attributed a quote to Ceren Akdag of Yapi Kredi. We would like to point out that these comments were not made by Ms Akdag nor anyone else at Yapi Kredi, and apologise for the error.

Commerzbank has confirmed market rumours that two senior figures from Dresdner Kleinwort will not now be joining it. Staff were told that Eddie Listorti, Dresdner’s head of FICC, and Stefan Gütter, its head of sales, would have senior roles at the new, enlarged bank when the takeover is completed in Q3 of 2009. The two were involved in pre-integration planning. Their decision will no doubt lead to a good deal of uncertainty among their existing staff at Dresdner.

Shared service centres debate: The benefits of centralization

China’s cabinet has approved a capital injection into ailing state lender Agricultural Bank of China, priming it for an initial public offering in late 2009 or 2010. In addition, $150 billion to $200 billion of failed loans will be sucked out of ABC, which was set up in 1979 to provide financing to China’s 800 million farmers, and stored in one or several of the country’s leading asset management companies. In a year full of record bail-outs, the capital injection will be provided by Central Huijin, a division of China Investment Corporation (CIC), Beijing’s sovereign wealth fund, ABC vice-president Pan Gongsheng told a press conference on October 22. Set up in 2005 to oversee the bail-out of other leading Chinese banks, Central Huijin will take a 50% stake in ABC, with the remainder to be held by the country’s finance ministry. The bank will also seek further capital – as well as much-needed management and risk-control expertise – from one or more foreign lenders, who will buy a strategic stake in the lender before its IPO.

Investors in convertible bonds have been washed out by the storm in debt, equity and derivatives markets, so potential issuers are having to look to other buyers.

Mitsubishi UFJ Financial Group closed its $9 billion investment in Morgan Stanley on October 13, ending speculation that the deal might not go ahead. The terms of the deal were more favourable to the Japanese institution than had originally been agreed, reflecting Morgan Stanley’s troubles. Rather than spending $3 billion of the total on ordinary shares at $25.25 each and the rest on convertible preferred shares with a conversion price of $31.25, MUFG will get a total of $7.8 billion-worth of the convertible preferred shares converting at $25.25 and the remaining $1.2 billion in preferred shares. The new deal offers substantially more protection for MUFG on its investment since preferred shares offer a fixed yield and their holders rank above common equity owners.