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The virtual roundtable

The tough route to quality

Investors in Japan's privatized companies are getting worried about the government's attitude towards its former charges. Less than two years after thrashing out an agreement with a number of former state-owned companies about the extent of their pension liabilities, the government has issued a demand for a top-up payment. Several railway companies some already privatized, others slated for privatization have been asked to cough up ¥360 billion ($2.8 billion) by accepting an increase in their pre-privatization era pension obligations.

The taming of Creditanstalt

Brazil's investment banks are engaged in their own distribution build-up a mini-version of the Morgan Stanley Dean Witter and Salomon Smith Barney megamergers in the US. Banco Bozano Simonsen has purchased the retail bank Meridional in a privatization auction and Banco Pactual has bought Sistema, a Sao Paulo commercial bank which ran into trouble. Both banks say they are looking to make further purchases.

The tough route to quality

A few decades from now, a loan syndication desk will come up with a novel way of conducting its business: it will print and distribute documents on paper. Clients will be impressed with this innovative approach. They will point to improved efficiency, potential cost savings, as well as the exotic feel of paper on flesh. A few of the market's more aged participants will have a sense of déjà vu.

Aad Jacobs, head of ING, enjoys a ritual on his journey to the bank's headquarters in Amsterdam each morning. He reads the paper, starting with the sports pages then turns to the business pages to see which bank ING is supposed to be buying that day. Some of the rumours, he says, leave him dumbfounded. But they continue to crop up for a good reason. ING has often expressed its wish to find a second home in Europe outside the Netherlands. Its executives are convinced that the single currency will lead to a single European market in banking services and are keen to position themselves accordingly and not fall into the trap of being over-dependent on a Netherlands market which itself may be attacked by new foreign competitors.

Sir,

For bond market participants the European single currency will be as good as implemented once they know in May which countries are included and at what rate. Sovereign and supranational borrowers have done most to adapt their strategies to the changes; on the whole corporates have been rather sluggish. As market structures, credit research and maybe even a benchmark emerge, it will be time to catch up. James Rutter reports

LEBANON

The virtual roundtable