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Large US banks with ambitions to become national franchise players now see that dream become more possible as slipping earnings bring weaker banks within acquisition range. Mergers look like the only way to grow. But along with the announcement of high-profile deals investors are making it clear that they have not forgotten the mistakes of the merger-manic 1990s. Antony Currie reports.

The imminent accession of 10 countries to the European Union comes at an inauspicious time for the EU project, with the collapse of constitutional proposals and an undermined Stability and Growth Pact. This will alter accession countries' attitudes to their obligations, with consequences for eastern European finance. Julian Evans reports.

Parmalat's collapse is leading regulators to question how a multi-billion dollar disaster was not foreseen and averted.

Western Europe | Emerging Europe | Asia | North America

The yield curve on European government bonds is set to flatten or even invert from March this year as new regulations force the region's second-largest group of pension funds to change the profile of their assets.

Gartmore's Japanese long/short equity AlphaGen fund was one of the firm's top performers last year despite market conditions that hampered the strategy. The US dollar and yen classes returned 17.1% and 15.9% for the full year 2003.

Reform is on the agenda for Morocco, although the king still wields comprehensive power. New openings are being sought to rebalance an economy dependent on tourism and to overcome stubbornly high unemployment. Rupert Wright reports.

Equity capital markets bankers agree that accelerated transactions and bought deals are here to stay. Such deals dominated ECM issuance for most of 2003, with fully bought deals accounting for 54% of all block trades. This, however, obscures the fact that many accelerated block trades that are not officially bought deals have aggressive backstop arrangements that make them little different to those officially classed as risk trades. Clients in need of cash like them because the discounts are tighter, sometimes substantially so. This is despite the fact that in every quarter last year they had substantially worse after-market performance.

In the Islamic awards section in January we mis-printed the name of Commerce International Merchant Bankers. Apologies.

The Chinese year of the monkey looks auspicious, says CLSA's self-styled wicked sorcerer of the east, Kenny Lau.

Investment bankers predict a healthy flow of equity capital markets business this year as stock markets continue the run-up that began last spring. If the secondary markets' tone remains strong, investors may be tempted to buy new issues. But they should remain suspicious over whose interests the investment banks are serving: theirs as investors, or those of issuers' of stock who grant mandates and fees to the banks.

Using convertible unsecured loan stock (Culs) along with cash could help different types of deals break the impasse between existing shareholders and bidders.