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Stockmarkets may be recovering but emerging market banks are still in crisis. The long struggle to restore capital adequacy will carry on for some time. When analyzing the top 200 emerging market banks, prepared by Fitch IBCA, it's important to remember this, writes Brian Caplen.

Emerging market banks: Problems unsolved

It's been party time in Lebanon. At the Baalbek music festival, Vanessa Mae, the violinist renowned at least as much for her sexy image as for her playing, wowed 4,000 at the Temple of Jupiter. At the Beiteddine palace, Tito Puente and Celia Cruz brought salsa and mambo to the Chouf. And in Tyre, Iraqi-born Kazem al-Saher drew the biggest crowd of all, packing 5,000 people into the Hippodrome on a sultry Friday evening.

As bankers pack off for the August break to their summer playgrounds, their Caribbean beach-side or Tuscan villas, or to their yachts, many will reflect uneasily on a tumultuous 12 months in global financial markets. This time a year ago, few could have guessed what a tornado was about to engulf them. News of the political and economic crisis in Russia filtered across the sunblock-scented airwaves in August. Within weeks, a huge speculative bubble in emerging-market debt that had built up in the first half of 1998 suddenly burst. Investors, traders and banks scrambled for margin and liquidity, spreads on all but the safest government bonds blew out as financial markets deleveraged, stocks tumbled and the dollar had its biggest ever one-day fall against the yen. The Federal Reserve found itself brokering the bail-out of an obscure hedge fund, which, had it collapsed, might have plunged the markets into catastrophe.

Internet killed the Wall Street star

by David Roche

India: Essar's woes mark end of easy credit

Leading supervisors on the Basel Committee on Banking Supervision are giving their 1988 rules a much-needed overhaul, trying to bring capital charges closer to the banks' own view of risk and return. But who's to say the banks are right? These proposals will be fought over tooth and nail by the lowly rated, the cautious, those suspicious of too much, too hasty sophistication, and those who mistrust rating agencies. Meanwhile, turf battles continue over lax banking structures in the US and protectionist banking structures in Germany. David Shirreff reports.

Tentatively at first, then in a growing rush of enthusiasm, the first corporate bonds in the new single currency began to appear in January. Before long, scores of companies were clamouring to reach this broad, new investor base. Then came confusion in pricing and growing investor disenchantment. But the restructuring of Europe should mean that the continent's corporate bond market is here to stay. And as investors learn to tell the good deals from the bad, it is beginning to acquire depth and maturity. Rebecca Bream reports

From cement makers to oil companies, from first-time issuers to regular borrowers, corporates big and small are targeting European investors with bond issues. How have they fared?

Asset Management: A derivatives approach to index tracking

Riding the tiger of volatility