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Forget forced devaluations, plummeting stock markets and widening bond yields, south-east Asia's greatest headache is its weak banking sector. While central bankers looked the other way, the region's banks lent heavily to finance stock-market speculation, overexposed themselves to property and made dubious loans to their own shareholders. As Maggie Ford reports, it is time for the reckoning.

Trade finance used to be a less glamourous part of the business. But times have changed. Banks have seen there's money to be made if deals are intricately structured and widely traded. That means building teams with the required expertise. When a trade financier's phone rings now it could well be a headhunter offering a better package. Rupert Wright reports on the new dynamism.

Only the best will survive

After the emerging-markets crisis, which countries remain creditworthy?

It's a simple idea. You own most of a company so you control its fate. But this notion of shareholder value has been slow to reach continental Europe where governments often allow small groups of long-term shareholders to control public companies. Things are starting to change. Cross-border mergers - even hostile foreign bids - are becoming more common, debt-financed deals are supplanting stock swaps and companies are making big acquisitions using hybrid tradable loans. Michelle Celarier reports on the Americanization of European M&A.

Credit derivatives will transform the way banks manage their balance sheets. Once banks adopt a true portfolio approach, they will create a fully liquid secondary market in credit risk. Before then, demand for loans, asset swaps and credit derivatives will surge as proprietary traders and hedge funds cut up the credit curve. Mark Parsley reports.

"Why Walter?" asked even senior staff at Dresdner Bank when Bernhard Walter was designated as the bank's next chief executive. From outside German banking came a simpler query: "Who is Walter?" So far, Walter has made no attempt to shed light on either mystery.

In the week that South Korea sought IMF assistance and Yamaichi announced bankruptcy, it was easy to miss the tiny column inches devoted to Jardine Fleming's flagging results. The latest figures show a continued decline in the Hong Kong-based investment bank's profitability. In the first half of 1997 it made a net profit of $29 million, meaning its contribution to parent Robert Fleming's profits had reached an all-time low of 16% of the Scottish bank's earnings. This is down from 28.8% last year, and well short of the target 25% to 33% Fleming wants.

Latest modelling techniques mean rocket scientists at banks can finally get to grips with the age-old problem of credit risk. It means a new lease of life for old portfolio theory and even older maths, as Mark Parsley finds out.

Issuer: Matav

When the Asian crisis struck this summer one investment bank was destined to appear more exposed than others - Peregrine. The Hong Kong-based firm employs 1,700 people in 15 Asian countries. After Asia's currencies began to slip in July so did Peregrine... at least if its rivals' rumours are to be believed. With confidence waning it looked as if the "fast and agile" bird had gone into a terminal tailspin. Then, as ever, its wily boss Philip Tose pulled something out of the bag. Steven Irvine reports on Peregrine's riposte to the gossip, interviews Tose about Zurich's new stake in the firm and looks into the unravelling of the firm's regional operations.