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Asia's two leading financial centres, Hong Kong and Singapore, are competing as gateways to the region. They're also learning to cooperate to keep their markets clean. But maybe they're acting too tough. Some bankers fault Singapore's Monetary Authority for responding more like the Delphic oracle than a regulator. Even Hong Kong's once laissez faire regime is getting over-paternalistic, say others, although the local vice of "rat trading" is not quite dead. David Shirreff reports.

Investment banks see Asia as the next big market, so the largest ones have all established derivatives operations in the main centres. That means fierce competition ­ but it's a fight for relatively thin demand. Regulators in some countries restrict use and local exchanges are undeveloped. But growth has come in surrogate markets and such instruments as covered warrants in Hong Kong. Antony Currie reports.

The culture that powers HongkongBank

The governments of Asia have never trusted financial markets. They view stock exchanges as little better than Chinese gambling dens, and find it hard to comprehend that bond, foreign exchange and money markets are any less dominated by wild speculation. As a result, the regulatory and tax environment for financial markets in Asia is still rooted in the 1960s. Banking systems are rigged in a such a way that banks are forced to provide cheap finance for industry, and allowed little room to develop. The biggest Asian economies have progressed remarkably in technical and managerial competence in the past 20 years, but their financial industries remain appallingly backward.

At the Kazan Universal Exchange in the Tatarstan capital, 1,500 km east of Moscow, traders can find virtually anything for sale from flowers to furniture to plumbing supplies. But upstairs at the exchange itself, the one item they will be hard-pressed to find are corporate stocks.

With economic growth still running apace Asian economies are hard-pressed to maintain and develop infrastructure. Project finance deals, in an increasingly private-sector context, are hotly contested by banks, but countries in the region vary widely in their ability to undertake them. Gill Baker reports.

Hillboot Intergalactic Asset Management,

Brokers' analysts in Asia have been arrested for taking their duties too seriously. But that's a minor reason for the poor quality of the region's research. Corporate disclosure is limited and accounting standards are poor. And analysts are young, inexperienced, harassed by overmighty corporate finance departments and intent on careers outside research. By Michael Steinberger.

For several months, lawyers have been fretting over the prospective introduction of Emu. Why? Christopher Stoakes explains.

Over the past two years, many Asian investors ­ from central banks to small Korean financial institutions ­ have suddenly become a driving force in international bond markets. Who are they? And what do they like to buy? Garry Evans reports.

Issuer: Republic of Austria

Europe is changing. Against all expectations, the advent of a single European currency, backed by a strong fiscal "Stability and Growth Pact", could prove the catalyst for a much more efficient corporate sector. Despite the economic absurdity of the Maastricht criteria, the struggle to meet them is producing what Europe needs most a smaller government take from national income.