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A shiver went through the international markets in February. The disaster in Russia entered a new phase as Unexim, the country's fourth-largest bank by assets, defaulted on its Eurobonds - bonds that are usually held sacrosanct.

Why did Morgan Stanley Dean Witter fly its international top brass to an urgently cobbled-together press conference in Madrid, five days after the news leaked of an acquisition so tiny in the grand scheme of its financials that the firm did not even have to report it publicly? Because the deal kicks off the European roll-out of Morgan Stanley Dean Witter's global strategy.

Nordic banks: Jostling for supremacy

It's just over two weeks since Márcio Cypriano was named president of Banco Bradesco, Latin America's largest private-sector bank. He's relaxed about it, often chuckling as he formulates an answer. Márcio Artur Laurelli Cypriano's laid-back attitude should be helpful in an environment in which currencies and the rules of the game change frequently. Referring to the Brazilian government's disastrous attempt to make an 8% controlled devaluation of the real on January 13, followed by the currency's collapse when it was allowed to float on January 15, Cypriano says: "In 50 years, we've had 19 currencies and indexers. Many times the indexers are confused with a currency."

Antonio Ortiz Mena is one of the outstanding Latin American economic policymakers of this century. In 12 years as Mexico's finance minister and 17 years as the president of the InterAmerican Development Bank (IDB), as well as periods in other important posts in the Mexican government, Ortiz Mena has been involved in virtually all key economic challenges facing the region over the last 50 years.

Antipathy between the Inter-American Development Bank's biggest shareholders -Brazil and the US - is long-standing. But when Brazil faced financial ruin they struck a new deal: the IDB can now fund IMF-style emergency lending programmes, and turn its soft-currency reserves into concessionary loans. But the bank's smaller members resent how the deal was done, and it has stoked up political and ideological differences among the staff. Brian Caplen reports.

Euroland Municipal Bonds: New city states

Euroland Municipal Bonds: New city states

Investors converge on Hungary

For a country crippled by bloody civil war, Sri Lanka has seen dramatic progress in privatization over the last three years. Even as bombs blew up the heart of Colombo's business district in October 1997 - an area housing the central bank, the Colombo stock exchange, the Securities Exchange Commission and the Bank of Ceylon - the country earned record revenues from privatization. The sale of the country's telecom monopoly, its second-largest development bank, half a dozen small state companies and several plantation companies, raised SLR22.5 billion ($336 million) in 1997, contributing 11.5% of total government revenue. The budget deficit for 1997 fell to 7.9% from 9.4% in the previous year, no mean achievement for a country that spends around 5% of its GDP on security.

It's not a new idea, but aficionados say it was never more relevant than today. To reduce the gross settlement exposures in the $1.2 trillion a day foreign exchange market a handful of banks and brokers have been working on a new way to trade the rates without having to send over the gross amount. They just settle the difference between the spot rate at the time the transaction was agreed, and the rate at delivery.

As a wave of consolidation sweeps much larger banking markets in Europe, Portugal's banks are eyeing up potential acquisitions and merger partners. Will limited alliances provide the scope the banks need to compete on the wider European stage? Or are they natural targets for acquisitive banks in Spain and elsewhere? Margaret Popper reports.