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The European leveraged buy-out market appears to have found its feet again after a nervous first quarter. But banks remain cautious about lending to highly geared deals. Can institutional investors such as collateralized debt obligation funds fill the gap?

The growing use of the internet in financial services provides a new challenge to banks' already stretched in-house technology teams. They must build new systems quickly at a time of rapid and fundamental developments in software and financial operations. The risk is that banks may spend heavily to develop proprietary systems that are already out of date by the time they are up and running. Application service providers may offer the answer, if banks can bring themselves to trust them.

Recent defaults on equipment vendor loans have prompted questions about the way corporates manage credit risk. Industrial companies have amassed many billions in credit exposure as a side product of their main business. Now, under growing pressure from equity investors and rating agencies, some companies are starting to quantify and reduce their mountains of trade debt.

A new emerging-market crisis, to follow that of 1998, has surfaced. The immediate Argentine crisis will be resolved. The politicians there have proposed budget cuts that, if supported domestically and implemented, will provide some relief for a while. But this won't address Argentina's growth dilemma. That's a supply-side issue and the downside of a vastly overvalued currency. And it won't do the trick of getting interest rates down to levels where Argentina could grow either. As for Turkey, I have no hope that interest rates there can be got down to sustainable levels either.

This year’s ranking of the largest 250 emerging-market banks indicates that China’s banks are still way ahead of their rivals in terms of size. Citigroup’s acquisition of Banamex will give impetus to consolidation in Latin America where banks will need sheer size to survive. Few of the handful of east European banks in the tables are expected to be still there in 2002. By Andrew Newby, with data from Moody’s Investors Service.

Secondary loan trading has traditionally been seen as rather a dirty business by European financial institutions.

When bankers involved in European credit issuance enthuse about the astonishing growth in the market they are only in part talking their own book. The euro revolution means demand is certainly there. Supply of the right mix of paper in the right amounts and with sufficient liquidity is another question. And beyond that there are growing suspicions that most buyers are not taking enough account of risk.

InterSec Research, the international investment management consultant, has produced the first top-50 table of asset managers ranked by European-sourced business. InterSec's Tabitha Rendall reports on the survey's findings

Like the unseen rule-master in the British television show Big Brother, the Basel Accord encourages infantile behaviour among its charges. Within the confines of the system, rational, intelligent adults are transformed into pouting, tantrum-throwing, devious children.

The unthinkable became true when the German government agreed to the demands of the European Commission to abolish state support for Landesbanks and savings banks last month. German private banks were quick to announce their interest in taking over some of the 562 savings banks, which have a market share of around 50% - the highest share of public banks world wide. But it might not be that easy. Although the agreement catapults the process of consolidation of Germany's overcrowded banking sector into a higher gear, it won't happen in the very near future.

Some problems occurred in the production of our Middle Eastern awards last month. The correct text of the awards for best bank in the region and in Kuwait follows below:

Although many industrial companies remain stubbornly unwilling to measure, let alone hedge, their trade credit exposures, there is no shortage of people looking to help them trade away their credit risk.