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When they were winning, the traders of Garantia, Brazil's leading investment bank, were formidable masters of the universe, confident and overbearing. Now they are down - after substantial losses last year - no-one in Sao Paulo feels much pity. But beneath the emotions lie more serious issues: can the bank founded 27 years ago by former tennis champion Jorge Paulo Lemann survive independently? Will it be bought by an international house? If so, what will happen to its daring traders? Brian Caplen reports.

Leaders of Africa's new deal

Investment bankers are sometimes accused of seeking an image that is more pin-up than pinstripes. One of their number at least will be among the throng at the Cannes film festival, but she will be quite happy for the paparazzi to keep their lenses trained on the starlets cavorting on the beach. Premila Hoon will be looking for projects to launch Société Générale's new film-finance business.

After decades of steady growth for six big banks, the Canadian banking sector is fast consolidating. The old certainties have been undermined by the announcements of mergers between Royal Bank of Canada and Bank of Montreal in January and Canadian Imperial Bank of Commerce and Toronto Dominion Bank in April. The rush to merge follows a global trend fuelled by the need to cope with increased competition, and was stimulated by the BankAmerica/NationsBank merger in the US. But unlike their US counterparts, RBC/BMO and CIBC/TD have to run the gauntlet of rigorous banking regulation, entrenched political conventions and hostile popular opinion.

The lemming effect whereby all emerging markets are sold off because of bad news in a few may be slowly breaking down. While Latin America has experienced fallout from the Asian crisis, a survey of US portfolio investors shows their stance towards it quickly recovering to a more positive one. This is largely because of the region's strong fundamentals and adept handling of volatitilty.

Short-term foreign debt is a killer for emerging markets as recent events have shown. Incredibly, few analysts bother to measure it accurately. Often they only consider medium- and long-term debt figures to make predictions about economic health. Small wonder so many of those forecasts prove incorrect.

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A corruption scandal at the Bank of Japan (BoJ) has provided an excuse to install a new team, and to pave the way for a more truly independent central bank. But will it all work out? The institution's image has suffered from the realization that commercial banks have been lavishing entertainment on all-powerful and seemingly unaccountable officials as a way of resolving business issues. An even bigger question mark hangs over the bank's independence from political interference in its interest-rate policy.

European corporates may enthusiastically be embracing the idea of shareholder value, but does this create value for bond investors? This was a question that investors were keen to ask Diageo - the new company created in last year's £9.75 billion ($16.25 billion) merger of Guinness and GrandMet - during its roadshows for a debut $500 million Eurobond. As the trend for European corporate M&A continues, debt investors will increasingly find that recognized names are absorbed into new companies with unfamiliar credit stories. That puts an emphasis on both borrowers and lead managers to explain developments to investors. The trend of hiring highly creative and expensive consultants to come up with new and apparently meaningless company names, scarcely helps.

With consolidation on their minds, ambitious investment banks are picking their partners. No-one expects SBC-UBS to be the last big merger. Now Euromoney gives you the opportunity to pick your own dream team of banks which are hot in the merger stakes. Rules of the first ever fantasy bank M&A competition are as follows:

The European Central Bank's governing council might not be meeting yet, but Deutsche Bank - who else? - has the inside track. For about six months its leading economists in 10 locations have been acting out a "shadow" ECB council which, in a monthly conference call, sets a shadow interest-rate policy for the euro.

Was your bonus smaller than expected this year? Feeling unappreciated at work? Do you think you can write an insightful essay on the world of international finance? Not only will you be honouring the esteemed Jacques de Larosière, but the top prize is $10,000.