Sustainability is a key concern for Fiji, the host of this year’s Asian Development Bank annual meetings. Its low-lying outer islands are under threat from rising sea levels as a result of climate change, and ocean plastics and overfishing are a growing risk to its revenues.

Best laid plans: Few would be so presumptuous as to lay claim to the ability to plot the progress of the global economy with unerring accuracy on a constant basis. But there are still many that make the prediction game their stock in trade – with varying degrees of success.

If there is one thing that characterises both the International Monetary Fund and the World Bank, it is, by their very nature, their internationalism. Their results over their 70-odd-year histories have been achieved through collaboration – the greater the collaboration, the better the result.

It is hard to think of a more appropriate setting for this year’s Asian Development Bank annual meetings. Manila, the Philippines capital, has long been a case study for under-investment in infrastructure, but the current administration is doing its best to shake off that reputation with an ambitious development plan.

Keeping afloat: Emerging market countries, where the IMF has concentrated much of its resources, reveal a strange state of affairs.

2017 is a significant year in the history of Asia’s financial markets. It is now 20 years since the devaluation of the Thai baht marked the beginning of a crippling financial crisis that rippled across Asia. It’s also 20 years since Hong Kong returned to Chinese rule, following the handover of the former British colony.

Normality redefined: There comes a time when things have been out of kilter with what would generally be construed as normal for so long that they begin to become accepted as ‘just the way it is’. And so it is in the debt markets. Few would claim that conditions are currently normal, although just what that actually means is open to question.

Yokohama is an apt setting for the Asian Development Bank’s 50th anniversary meeting. The Japanese port city was one of the earliest to open to international trade, and one of the first beneficiaries of infrastructure financing that combined public and private resources at home and overseas.

Up in the air: While once viewed as the one market sector that could be relied upon to offer a sea of calm within a turbulent world, the sovereign, supranational and agency arena has become increasingly influenced by events that have called previously trusted notions into question.

Optimising Sustainable Finance: China’s journey and its impact

Chart of the year

Ready for take-off: It has taken some deep surgery, but India’s capital markets are at last on a much stronger footing. Now that regulators have done their part, it is up to investors and business leaders to take the economy to the next level.

It has taken some deep surgery, but India’s capital markets are at last on a much stronger footing. Now that regulators have done their part, it is up to investors and business leaders to take the economy to the next level.

Strength and depth: Few would claim that conditions in the capital markets could currently be described as normal. Nor that they have they been so for a while now, given the various stimulus programmes that have been enacted around the world in an effort encourage growth in the face of economies flirting with stagnation.

Global monitor: With 189 member states encompassing virtually the entire globe, the International Monetary Fund is uniquely positioned to monitor the health of the economic environment throughout the world.

The biggest challenge of any special report on Asia’s debt capital markets is usually finding a common thread among the region’s many individual bond markets. The latest report, however, comes with no such conundrum.

Sustainable infrastructure agenda moves centre-stage

Overcoming hurdles: With attention more often than not focused on other parts of the eurozone and the problems faced by countries mainly in the southern part of the region, it is easy to forget that Germany is not without issues of its own.

Green shoots: There are few subjects in the capital markets that have generated more headlines over the past few years than socially responsible investment.

Star turn: In the fluid world of emerging markets, Turkey has this year presented more opportunities than its CEEMEA peers for investors to indulge their views.

The Asian Development Bank is taking commendable steps to position itself as more than just a lender. Faced with rising regional wealth and the arrival of new multilateral institutions, it is right to have one eye on its long-term future. To remain relevant in supporting Asian development, however, it will need to forge new partnerships and show that it can offer more than just its capital.

The outlook for Asia’s capital markets has changed dramatically in the first six weeks of 2016 – and not for the better. Most outlooks conceived before the end of last year had been torn up by the middle of January, written off as overly optimistic projections after a rout in commodity prices and global equity markets savaged global confidence.

Consistent performer: A little over a year into the European Central Bank’s quantitative easing programme and the dust is finally beginning to settle.

One step forward, one step back: While it has been Argentina that has grabbed the bulk of the recent headlines after finally reaching an agreement with holdout bond investors, there is much more to Latin American capital markets.

National Australia Bank’s focus on corporate bonds, bank capital and securitisation paid dividends in 2015 as the Australasian debt markets continued to expand beyond their traditional bank-dominated core.

Eighteen months into Narendra Modi’s government, things are looking up for India. Growth is quickening, inflation is under control, and reforms are coming through. Harnessing that momentum, however, remains a constant challenge, and India’s prime minister will need to work hard if he is to come close to meeting his grand ambitions.

High expectations: Eighteen months into Narendra Modi’s government, things are looking up for India. Growth is quickening, inflation is under control, and reforms are coming through. Harnessing that momentum, however, remains a constant challenge, and India’s prime minister will need to work hard if he is to come close to meeting his grand ambitions.

Shape-shifting: The debt market is a singular animal: no matter what situation arises, it simply evolves in order to address it.

Mean Streets: If the IMF were a cop, it would be the righteous Commissioner Gordon, desperately trying to maintain order in Gotham City while waiting for Batman to turn up.

Asia’s debt capital markets are facing an uncertain future. Interest rate hikes are on the cards in the US, China’s stock market is in turmoil and the eurozone may be falling apart.

Stimulating times: After years of bailouts, downturn, debt, fouls and penalties, it would appear the eurozone first team is finally showing signs of being ready to compete. The technical staff’s promise to do “whatever it takes” to keep the team together gave both players and supporters a lift. And after overcoming question of its legality, the additional stimulus provided by quantitative easing is providing additional confidence that they can cope should the team come unstuck once again.

Shifting sands – Credit markets posted yet another year of storming supply, a scene played out in an unnatural landscape constantly reshaped by shifting sands. On the one hand, the US called time on its quantitative easing bond-buying programme; but, on the other, the European Central Bank scrambled up the dunes to proclaim an initiative of its own. In the QE stakes, Frankfurt simply replaced Washington.

Hype is returning to the renminbi capital markets. After a few lacklustre years for Chinese equities, Shanghai and Hong Kong are on their biggest bull runs in years, while interest rate cuts have lifted interest in renminbi bonds.

Rising to the challenge: Hype is returning to the renminbi capital markets. After a few lacklustre years for Chinese equities, Shanghai and Hong Kong are on their biggest bull runs in years, while interest rate cuts have lifted interest in renminbi bonds.

At a crossroads: To say that Turkey is at a crossroads and must choose its future direction is simply to state an age-old truth: it always has been. Geographically, Turkey is at the crossroads of Europe and Asia, an ornate doorway between two regions. The EU’s endless debates over the merits of letting it join have only emphasised its unique location – while fuelling its frustration.

This year’s Asian Development Bank annual meeting takes place on the European side of the Caspian Sea in Baku, Azerbaijan. While that may seem an odd choice for the Manila-based institution, it does provide an excellent backdrop for many of the talking points troubling the more Eastern parts of Asia.

The pace of deals has slowed in recent months, but South-East Asia continues to provide a tantalising opportunity for capital markets professionals.

Rather like the best Spaghetti Westerns, the usual suspects are present in Latin American finance – along with a familiar plot line on the tussle between order and chaos along an unruly frontier.

In boxing, the crowd often rallies around the underdog – especially if the fight is in the country that invented the sport. After tumbling to the canvas, Greece has staggered back to its feet and is now risking everything in order to win.

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Emirates Aluminium is a major joint venture of the two largest Emirates of the UAE, Abu Dhabi and Dubai. It is located in Taweelah in the Emirate of Abu Dhabi approximately halfway between the two capital cities on a 6km2 site containing two potlines, 756 reduction cells, a casthouse, and a power plant. By Markus von Haniel (adviser) and Natalia Bajerlajn (associate) in Mubadala’s structured finance and capital markets team.

IFR’s 2000th special issue would be incomplete without recognising the achievements of Hans-Joerg Rudloff, the man at the centre of many of the key developments in the Euromarkets since the formation of IFR. He spoke to Keith Mullin.

A decade and a half since the Asian Financial Crisis, the turmoil in Europe has left Asia looking like a safe bet. IFR’s Asia Pacific bureau chief, who reported extensively on the crisis, asks if the shock of 1997 could ever recur.

It has not always been easy, but the global debt capital markets have grown year-on-year by 4% to US$4.2trn in the first nine months of 2012. Access is a long way from comprehensive, but central bank presidents’ comments – well, one in particular – have helped to open markets further.

How times have changed. In the past, talk of bailouts, IMF loans, and fiscal mismanagement usually meant one thing: yet another emerging market country had run into trouble and needed saving. Now this type of language is being applied to the eurozone. In contrast, the so-called emerging markets are in much better health. Indeed the term “emerging markets” is becoming a misnomer. “Growth markets” seems a more appropriate appellation.

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The stature of covered bonds as a funding tool continues to grow by leaps and bounds. Developments that will see senior debt become bail-inable by 2018 are adding to their allure; as is their legal robustness and unassailable place in the capital structure in the event of issuer insolvency. In short, covered bonds have offered a funding lifeline, certainly to non-peripheral banks whose access to capital has been ravaged by the effects of the eurozone sovereign debt crisis.

A year on from the last Top 250 Borrowers report and the issues that dominate the funding landscape remain largely the same as they did then. Concerns about the eurozone were at the top of the worry list and they are still there today, casting a long shadow that stretches far further than the continent of Europe.

The combination of high interest rates, a slowing economy and unpredictable government policy is hardly the ideal backdrop for dealmaking in India’s capital markets, but bankers and investors at IFR’s India Conference were betting that the country’s long-term potential will outweigh near-term volatility.

The eurozone crisis has proved to be a sprawling saga that matches anything staged at Bayreuth. Germany, our chief protagonist, rests on the laurels of continuing growth led by robust exports. But the demons of political instability lie lurking in the wings and threaten to blight the feast. Germany remains the centre of stability in the eye of the eurozone storm – but it has challenges of its own. This special report looks at critical developments, including the problems faced by auto manufacturers as they deal with increased competition, energy utilities coping with the switch from nuclear to green power sources and renewable firms’ subsidy cuts.

Once the stable bedrock of the markets, the SSA sector found itself rocked to the foundations as concerns mounted about the ability of sovereigns to deal with the crisis that engulfed asset classes across the board – something largely viewed as self-inflicted in the first place.

As Turkey gets to grips with hefty economic policy challenges – and shrugs off the complications of living in a volatile region – it exudes a self-belief hard to find elsewhere.

One wonders how your average Latin American policymaker has avoided developing a squint, having to keep one eye firmly on domestic markets while the other is fixed so intensely on Europe’s unfolding Greek tragedy. Yet it is a measure of how LatAm financial markets have bolstered their resilience to foreign shocks that at this juncture a squint is likely to be the worst byproduct of the eurozone crisis.

IFR has been giving out awards for more than a quarter of a century. The latest event in January 2012 raised £1.26m, taking the total raised by attendees to more than £20m. This report looks at how that money has benefited children around the world, adds some of the IFR Awards history, and a light-hearted look at the Awards process and some of the more infamous winners.

Confidence is running high that Asia’s rapid growth will protect the region from the worst of the turmoil in Europe. Yet global bank exposure to Asia, at over US$2trn at the end of June, means the threat of capital flight is ever-present. Is Asia guilty of complacency?

The remarkable political events in the Middle East this year have made their mark on the local capital markets, but confidence in the region - both as a capital markets hub and as a deal generating region - remains.

The remarkable political events in the Middle East this year have made their mark on the local capital markets, but confidence in the region - both as a capital markets hub and as a deal generating region - remains.

When policymakers in the developed economies took concerted action in late 2008 there was a widespread determination to prevent the recession turning into a prolonged period of depression. Record low interest rates, a little harmless inflation and a stiff dose of banking reform were meant to get the world economy turned round and back on a path of sustained growth. And growth was going to be the key to taking the sting out of reducing indebtedness – governments, financial institutions and consumers could all cut their borrowings without feeling too much pain.

After rebounding quickly from the 2008 credit crunch, Asia, once again, faces a threat from a crisis not of its own making.

India has all the right ingredients. Yet, instead of producing a delightful dish to tempt even the most sceptical of emerging markets investors, its recipe is in danger of leaving a rather bad taste.

India has all the right ingredients. Yet, instead of producing a delightful dish to tempt even the most sceptical of emerging markets investors, its recipe is in danger of leaving a rather bad taste. A stable government and tight controls on capital flows protected India from the worst of the global crisis in 2008-09, but the country has failed to capitalise on its position of strength so far.

It has been a year that has seen the headlines dominated by a sovereign debt crisis in Europe. This time last year, the carnage that would be wrought by cripplingly high debt in Greece, Portugal and Ireland was already visible on the horizon. Europeans had already taken concerted action to save Greece, although the cost of those measures remained unknown – as they arguably still are today. Questions were being asked about where that left the other PIGS – Spain was still viewed in a similar light, before distancing itself, and then ultimately being drawn back in.

Few markets managed to come out of the crisis in one piece. But for covered bonds, the past few years have been different, with the asset class coming out bigger and more enhanced. Once considered a niche – even, some might argue, boring – product, the decline of other parts of the bond market have suddenly cast it into the limelight, bringing a variety of new participants into its orbit.

The timing of this year’s Asian ECM report could have hardly been better. Across the region – if not the world – markets are at a crossroads. The formidable recovery of 2009–10 has led to the inevitable question: have markets rallied too far?

The politics of Europe have always been delicate for Germany. But in the last 12 months the volume of protest among Germans at having to bankroll European financial rescue packages has reached hitherto unknown levels. Many Germans are at a loss to explain why it falls to them to bail out profligate European partners in first Greece, then Ireland and now Portugal. Politicians and parties associated with the largesse bestowed upon the PIGs have already been punished at the polls and things could get worse still.

Vietnam’s capital city is, in many ways, the perfect setting for this year’s Asian Development Bank annual governors’ meeting.

Sovereign, supranational and agency issuershave long had a habit of concentrating their borrowing in the first half of the year. But that trend seems to have accelerated in2011, with many of the larger SSA issuers having completed up to 40% of their annual borrowing targets by the end of the first quarter alone.

In little over a decade, Turkey has gone from being the sick man to the rich man of Europe. While other European countries have come through the crisis indebted, stunted and broke, Turkey has gone from strength to strength. Last year was a watershed, with growth coming in at 8.9%, inflation in low single digits and real interest rates close to zero.

It’s been a good twelve months to be a market outside of Europe and the US. With many developed nations struggling under the weight of public and private debt, most emerging markets have been arousing a lot of attention from growth-hungry investors. But some markets have emerged more than others, and Latin America is definitely home to some of the sexier examples.

Indian capital markets are booming. ECM, DCM, loan syndications, infrastructure and M&A are all firing as investors and financiers vie to put their money to work. The tone of IFR’s Indian Capital Markets Roundtable in Mumbai encapsulated the mood perfectly. In a wide-ranging conversation, participants offered up a very positive outlook for the year ahead.

Asia’s credit markets have entered 2011 in fine form. After an unprecedented run for emerging markets in 2010, confidence in Asian bonds is running high. The international debt capital markets have finally established themselves as an essential tool for the region’s fastgrowing private companies – not just public sector agencies – and global investors have shifted their Asian allocations to overweight.

IFR Asia has named JP Morgan the winner of its 2010 Bank of the Year award for the second year running. The award recognises the firm’s ability to adapt to the swings in the global markets over the year, where it held off increasingly stiff competition to build on its market-leading financing platform.

The annual IFR/PFI Middle East Review comes at a time of renewed confidence in the region and its capital markets. The Dubai crisis has abated - although there is still plenty of restructuring work available for assets linked to Dubai Inc. The Middle East region is getting back to concentrating on growing on the path it had set itself before the Dubai, and indeed the global financial crisis, hit.

Investing in emerging markets has always been a pursuit best avoided by the faint-hearted. Typically boasting less liquidity than developed markets, and usually backed by less robust and diversified economies, they are renowned for their volatility. As a place to invest or set up a business, many have excessively complex legal and regulatory systems, among other assorted hurdles to doing business, that dissuade any but the specialist from participating.

What is normal? It is a question nobody knows the answer to, exactly. The last time there seemed to be a clear answer to it was in 2007, before the credit crunch bit, but it seems increasingly clear that the answer that would have been given then no longer holds. In the second half of that year, the market was abnormally frozen, while 2008, defined by the collapse of Lehman and the near collapse of the financial system, was anything but normal.

If 2009 was all about survival, then 2010 has been a year of progress. Having weathered the storm of the financial crisis last year, Asian issuers have taken advantage of resurgent demand for emerging market assets to launch a variety of innovative deals.

2010 was the year concerns about the health of European sovereigns eclipsed the banking crisis. For the first time since the credit crunch of 2007, financial institutions were no longer the sole target of public opprobrium, and concern about defaults centred on entire countries. Bailouts were no longer an enforced favour from taxpayers to their national banking systems but had become instead an international rescue mission mounted to prevent the EU bloc from foundering on its own economic contradictions.

Before August 19, the last time the Sensex index touched 18,400 was just after its all-time peak of January 2008. India’s capital markets had just recorded the country’s biggest IPO and confidence was running high. Of course, the Reliance Power listing proved to be a disaster and the markets collapsed. Is it different this time?

Before August 19, the last time the Sensex index touched 18,400 was just after its all-time peak of January 2008. India’s capital markets had just recorded the country’s biggest IPO and confidence was running high. Of course, the Reliance Power listing proved to be a disaster and the markets collapsed. Is it different this time?

Asia’s debt capital markets enjoyed an impressive rebound in 2009 and continued to build on those foundations in the first half of 2010. Asian sovereigns remain popular international issuers even during a period of renewed turmoil in the European public sector, while global investors have again warmed to Asian high-yield bonds, welcoming a number of deals from the crowded Chinese property market.

When an economy delivers first quarter year-on-year growth of 12%, it seems churlish to moan. Chinese exports grew 48.5% year-on-year in May; the trade surplus is widening; and the latest eye-popping figure for foreign reserves is US$2.44trn. On the face of it, things could hardly be going better.

A sense of euphoria was to be expected in the year that followed the 2008/2009, when banks and borrowers had to work hard to keep their heads above water. And in the 12 months from May 2009 to April 2010, the scope of this report, the debt markets have started to resemble something like their old selves: loans first became widely available, and then, increasingly as the year went on, even became competitively priced. Bonds had an even swifter return to prominence.

Since the depths of the crisis, as some semblance of normality has returned to financial markets, covered bonds have regained their status as the poster child of a low-risk investment strategy. And its appeal has even broadened in recent years: some hedge funds looked at the market for the first time during the crisis, and, while few are still active buyers, a greater number of pension funds and insurance companies invest than ever before.

Turkey has weathered the financial crisis better than any had expected and it has emerged the other side with its reputation enhanced. In a neighbourhood where much has gone wrong, Turkey has seemingly done everything right.

In many ways it has been a fantastic 12 months for Germany. Some of the markets for which it is most renowned have witnessed an impressive return to form that almost constitutes “business as usual”. The Pfandbrief sector, the financial market most synonymous with Germany, has in some ways shrugged off memories of the credit crunch and looks to be in rude health.

Australia’s market for new initial public offerings, already moribund, has been further dented by an Australian Taxation Office attempt to levy a tax on foreign private equity exits.

Sometimes markets are shaken by an event so seismic that everything else seems to fade into the background. Greece’s slide to the brink of bankruptcy was such an event. With the collapse of Lehman still so fresh in the mind, cataclysmic consequences do not seem so far fetched as they once did.

Since the Asian Development Bank was created in 1966, the multilateral institution has been facing the brunt of criticism from NGOs and wrestling politics with its 67 members. Corruption in the region is deep-rooted and the political situation as always remains volatile. In this kind of environment, the ADB’s ambitions of eliminating poverty from the region and promoting financial and economic integration seem an impossible dream.

This year should be the one in which the key questions about whether the financial crisis is over and whether the recovery is sustainable are answered. The general mood is one of cautious optimism but there are fears about what will happen when government stimulus packages are withdrawn and interest rates start rising in earnest.

It has been an extraordinary year for the debt capital markets. Just over a year ago the world economy flew so close to the flames that it seemed like complete meltdown was the most likely outcome. In the aftermath, most markets ceased functioning in any meaningful way. The loan markets went into a paralysis from which some are still tentatively emerging, while even those that resumed business more quickly have shrunk. The equity markets went into freefall, and though they have since bounced back, opinion is sharply divided over how sustainable that recovery is. Even the bulls would have to concede it will take years before they get back to where they were.

The derivatives industry has found itself at the centre of the debate about regulatory reform, an issue that remains at the top of the international agenda. It can have no complaints about this: CDS played a massive part in whipping up the storm that engulfed Lehman Brothers, and would have claimed other high-profile and economically devastating casualties in AIG, Citi and others, but for the costly government interventions. While many argue derivatives did not cause the crisis, it is hard to argue they did not exacerbate it.

More than at any time since 1998, the last year has seen the IMF and World Bank in the dock. In one sense the crisis has given them a new lease of life, a new relevance. As the crisis has unfolded, the IMF has been given greater funds to cope with an expected spike in demand. It has worked hard to shed the traditional stigma attached to IMF aid, and created new support packages – acknowledging that, with aid as with so much else, one size often does not fit all.

How different the world looks in just 12 months. The National Champions of the European Capital Markets 2008 report was published just days before the collapse of Lehman Brothers – the event that became the defining moment of the financial crisis that had started with the credit crunch one year earlier. It is hard to identify an event more seismic for banking – in Europe and globally.

If you set out to prove the decoupling hypothesis, the idea that Asian markets are now sufficiently distinct from the US and Europe to be insulated from the global financial crisis, you could do worse than starting with India.

Turbulence of the type experienced in financial markets in the last 12 months has a habit of turning things on their head. Banks have needed an iron grip to hold on to their rankings in the capital markets businesses they participate in. In the first half of 2009, reputation has counted for little: there has arguably never been a better time for smaller and medium sized players in any business to make a play for the big time.

Good use was made of Equity Capital Markets in 2008 as companies, led by financial institutions, rushed to raise funds and secure their futures. As the global economy continued to falter in 2009, that need has only increased, with a broader spread of corporates desperately seeking funds to survive.

It has been the most difficult 12 months in living memory for financial markets. Compared to the period following the collapse of Lehman Brothers last September, the previous chapter of the crisis – the credit crunch that began in the summer of 2007 – seemed positively mild. The period covered in this report was one of frequent illiquidity and ongoing concern about who would follow Lehman into financial oblivion.

It has been a long, cold winter in the financial markets. The land of the covered bond has been as bleak as anywhere, with issuance in 2008 and early 2009 reducing to the merest of trickles. In 2008 there were questions about whether the covered bond market could ever regain its relevance after the emergence of the government guaranteed market robbed it of its natural investor base.

Bond markets have experienced an issuance bonanza this year, with both the size and frequency of deals in the ascendancy. Triple A activity has traditionally been frenetic in the first quarter of the year, with much of the issuance from the major agencies coming near the start of the year. There has, therefore, been a lot of Triple A paper knocking about in the first months of 2009.

China is having a good crisis. Its economic growth rate may have halved but the Chinese economy is still set to grow at 6.8% this year, a rate that would be blistering almost anywhere else in the world. Hong Kong and Taiwan are not doing as well but the mainland’s strength is a valuable prop.

Welcome to the first Reuters Publishing Islamic special report – produced by journalists from IFR, PFI, Acquisition Monthly and IFR Securitisation Report. This is a truly global effort to capture the up-to-date picture of one of the world's most important capital markets, in detail.

The downturn has not been comfortable for Turkey. Exports are collapsing. Unemployment is high, at around 15%, and rising. Youth unemployment, at around 25%, is particularly worrying, undermining one of the macro economic factors Turkey has going for it – its young population. It is in the process of negotiating an IMF loan, a stark reminder of its economic problems. And it has an illustrious history of economic problems morphing into political ones.

The financing of Abu Dhabi’s ambitious Formula 1 racing circuit will bring significant benefits to the Emirate’s rapidly growing economy. By Jody Waugh, a senior associate in the banking and finance team at law firm Al Tamimi & Company.

If only financial crises were more discriminate in the havoc they wreak. Unfortunately for Germany, the downturn has had scant regard for economic justice: the prudent savers and the hard workers have seen their economies savaged with vigour that is almost indistinguishable from what has been witnessed by the spendaholic Anglo-Saxons.

Central and Eastern Europe* – a collection of countries that are as economically diverse as they are geographically close. As such, the region offers a fascinating laboratory for an analysis of the global downturn.

When the crisis began unfolding there was a sense that Asian banks were in a much better shape than banks elsewhere in the world. So far that has proved to be the case; at least up until June 2009. And while challenges remain, it looks likely to remain the case. Asian banks have fared quite well by almost any measure: capital adequacy, capitalisation, loan growth and profitability.

What a difference a year makes. Just 15 months ago, the world’s financial markets were staring into the abyss following Lehman Brothers cataclysmic slide into bankruptcy. To say that the past year has been tumultuous is an understatement.

The global financial crisis has come to Asia and 2009 looks set to be a year of pain for Asian economies. If optimists were talking a year ago about how Asia had decoupled from the US and European economies, today they understand more fully what it means to live in a globalised word.

If there has been one bright spot in capital markets amid the global gloom then it is surely the Asian local bond market. Even as wider capital markets issuance has shrunk, many Asian countries are on track to post record issuance this year.

Signs of life have emerged in Asian equity markets. Investors have drawn some badly needed confidence from the recent global stock market rally and issuers have worked out what sort of deals they can get done in tough market conditions.

Another year, another long-term strategic blueprint-style plan for the Asian Development Bank. This year, however, the bank’s planning is underpinned by sizeable increase to its resources.

Warren Buffett famously called them financial weapons of mass destruction. In the world of derivatives, there has probably never been so much devastation as was evident in the aftermath of the collapses of Fannie Mae, Freddie Mac and Lehman Brothers.

It has been the most difficult year in living memory for finance. Less than twelve months ago, many bankers were still optimistic that they would arrive back at their desks for the New Year to be greeted by a newly resurgent market. How naïve that seems now.

A little over 12 months ago, bankers still regarded emerging markets with the kind of excitement usually exhibited by young children approaching their birthdays. Constituting a significant proportion of the world’s land mass, emerging markets seemed to offer almost boundless opportunities as they struggled to close the gap on their more developed neighbours.

Environmentalism has come a long way in a short space of time. The cause that was once the preserve of a radical minority has now burst onto the mainstream: bankers and traders have joined the dreadlocked hippies in the belief that the world needs to move to a low-carbon economy.

A look around the top investment banking players in Europe in the current climate quickly confirms the difficulties most have faced since the middle of 2007. An analysis of the individual performance of those banks is inevitably a kind of referendum on their performance in the face of the credit crunch, although they do not operate on a level playing field, and the impact the crisis has had has been determined – at least to some extent – by the country in which the bank operates.

The last 12 months have certainly been interesting. But at times like these it is easiest to differentiate between the highest quality issuers and everyone else. During the extended bull market that ended in the summer of 2007 there was a gradual erosion of the kind of hard-headed investor scrutiny that has since returned in force. Companies wishing to raise capital had found it easy surfing the waves of investor exuberance, without having to worry unduly about pricing their debt. No more though.

It has been an interesting year for covered bonds. While few asset classes outside commodities have flourished in the current market conditions, covered bonds on aggregate have enjoyed relatively good performance. This has ranged from being among the least bad performers in the credit universe in some of the newer covered bonds markets – such as Spain and the UK – to delivering very good returns in absolute terms in some of the more established markets – like Germany and France.

Investors have frequently fallen into the trap of viewing the Triple A label as the equivalent of a capital guarantee. Being less sophisticated, retail investors have been particularly susceptible to this. In the extended bull market that finally ended in the summer of 2007 this illusion looked increasingly like reality and investors had no reason to question the system that was bringing them consistent financial rewards.

So much fuss has been made of the political issues raging around Turkey in recent years that it is easy to forget its financial markets. The question of Turkish membership of the EU has received more column inches throughout Europe and Turkey than many other issues put together. More recently, the question of how far Turkey’s secular traditions should be respected has been equally explosive.

So much fuss has been made of the political issues raging around Turkey in recent years that it is easy to forget its financial markets. The question of Turkish membership of the EU has received more column inches throughout Europe and Turkey than many other issues put together. More recently, the question of how far Turkey’s secular traditions should be respected has been equally explosive.

In fashion, as in finance, things move quickly. It is clear from Moscow’s ubiquitous designer handbags and expensively tailored suits that the 1990s are but a fading memory for the devoted fashionistas of the new millennium.

Central and Eastern Europe is a fascinating collection of emerging markets benefiting from the reforms they pushed through in order to secure European membership.

Germany is at heart of Europe. It is a metaphor that encapsulates the importance of the country, which sits at the centre of the continent, but also the fundamental interrelationship between the fortunes of individual country with the continental collective. As Europe has suffered the global virus of disappearing liquidity and recessionary fears, so the beating of the heart has grown somewhat fainter. But it beats on.

No longer at the centre of the financial crisis as in times past, Latin America has been relatively resilient amid the storm generated by the US credit crisis. On the contrary, the region has been seen as a sort of safe haven, given the strong fundamentals, deepening local markets and upward ratings trajectories in countries like Brazil, Peru and Colombia.

Welcome to the third annual Reuters International Financial Review (IFR) and Project Finance International (PFI) report on the Middle East capital markets. We publish the report at a time of unprecedented turbulence in the global markets. For much of this year the Middle East has shown a degree of isolation from the global problems, but the latest shocks to the system will have an impact even in this region.

India stands on the threshold of economic greatness, if only it can ride out the global credit squeeze and overcome an innate desire to regulate itself out of international competitiveness.

The US and European governments have committed trillions of dollars to bail out the global banking industry. But, gee, how to pay for all that?

In the midst of a credit crisis that has put the staggering complexity of modern finance under scrutiny, one would think that a market centered on something as old-fashioned as banks lending money would be viewed favorably. If only things were that simple. The problem is that banks have to fund themselves and that is just about the hardest thing in the world at the moment. Nobody is lending money – and that spells trouble for loan banks.

It has been an annus horribilis for the global banking industry with the impact of the US sub-prime crisis resulting in huge write-downs in the US and Europe and higher funding costs for banks everywhere. A bad year, that is, except for banks in Asia.

India stands on the threshold of economic greatness, if only it can ride out the global credit squeeze and overcome an innate desire to regulate itself out of international competitiveness.

The rise of domestic debt markets and the fall of G3 issuance has been the big theme in Asian bond markets this year as local markets have proved impressively resilient to the turmoil in global credit markets and demonstrated some newfound maturity.

The leafy, tranquil compounds of the Asian Development Bank have the feeling of a university. The Manila headquarters of the anti-poverty institution indeed is brimming with ex-academics, and the place has a very think-tank-like atmosphere.

Fifteen years ago South-East Asia’s economies were known as tigers, but that all changed in 1997 when the first wave of the Asian financial crisis struck. South-East Asia was particularly badly hit and it has been a slow march back to credibility and prosperity.

It has been a mixed year for Japan with the country and its capital markets able to boast of significant achievements but also facing challenging obstacles. Overall, however, the tone remains positive.

No-one could claim that 2007 has been uninteresting. Unpredictable, maybe: uncomfortable, almost certainly: but uninteresting, definitely not.

The Latin American loan market has ostensibly held up well against this summer's credit crunch, with very little seepage from its neighbours to the north. But credit committees at large European and US banks are starting to ramp up the pressure and bankers are warning of tighter terms on the horizon.

Robert Zoellick took over as president of the World Bank at the end of June after controversial US politician Paul Wolfowitz was forced out of the role. Zoellick is a far more skilled diplomat than Wolfowitz and has a better understanding of modern finance, but he faces significant challenges in enacting change at an institution where anti-American sentiment has grown. Jon Macaskill reports.

After a solid start to 2007, the ECM market has been thrown into disarray as the sub-prime meltdown hit equity markets hard through August. With most markets taking their usual holiday breather, the true impact of increased volatility and investor nervousness will not become apparent until later in the year. Pipelines remain in tact, although ECM bankers who were quick to shrug off the wider impact of the late February correction, are facing what should be their busiest time of year with some trepidation.

Over the last 12 months the apparently unstoppable momentum of the global securitisation industry has suffered a major jolt. The immediate cause lay in the sub-prime segment of the US home equity market, but the ripples have spread out to affect other jurisdictions and market sectors.

Turn the clock back just a few years and the image that sprang to mind at the words "covered bond" was of a German market proud of its traditions and robust structure.

After five years of its most stable government in decades, Turkey faces both presidential and parliamentary elections this year, with a possible return to coalition government before the year end. Political concerns mean that it will be difficult to make tough economic decisions, but if the achievements of the outgoing government are going to be built upon, the country still has a lot to do.

And so it continues. In spite of a few temporary setbacks, the credit markets have remained robust for yet another year, with cash-rich investors providing a solid foundation on which borrowers can build. Although issuers have been more than happy to indulge this demand, supply has still been eagerly snapped up as buyers look to put all that money to work.

With huge sums generated by the oil price rise and more competition in some sectors, Middle Eastern companies are increasingly considering mergers and acquisitions. At the same time, regionally based funds are flexing their financial muscles overseas and targeting major companies.

For firms active in European capital markets, the second half of this year is going to look very different to the first. Even as recently as March, many finance professionals were predicting the possibility of a bumper year across a raft of asset classes. M&A activity was still spurring on financing needs across the continent, and apart from the occasional dip, markets were generally holding up.

India continues to capture the imagination of international investors. The country’s capital markets are developing almost as quickly as its economy, which is growing at a brisk 8.4%.

Exciting and scary are the two words that best sum up global leveraged finance in 2007. The market is exciting because the deals are getting bigger and more complex and it is scary because the pricing is getting tighter and the financing structures more aggressive.

The European real estate market continues to boom, and the capital markets are busy fuelling the frenzy. From financing private equity-backed M&A through lending to feed hungry CMBS conduits, bankers are working hard to fund the growth of property companies and meet the demand from investors for new product.

This year's special report on Germany finds the country confounding the doubters in many areas. Despite concerns about the ability of the Grand Coalition government to deliver on reform, the still booming world economy has boosted economic growth, and against that background, corporates are increasingly looking beyond the country's borders for acquisition-driven growth opportunities.

The loan market has displayed its famous resilience in Asia again this year with the deal flow from many jurisdictions strong despite the much talked about sub-prime turmoil that has become the constant backdrop to capital markets issuance this year.

The fundamentals for Asia’s banking sector improved for one more year of the credit cycle during 2006, with the region’s bumper economic growth driving earnings and asset accumulation. The grab for assets could harbour future problems, however, as relaxed lending practices could haunt banks in a downturn.

India continues to capture the imagination of international investors. The country’s capital markets are developing almost as quickly as its economy, which is growing at a brisk 8.4%.

Securitisation in Asia has gone from strength to strength. While the troubles in the US sub-prime market have cast a pall over Asian issuance, the long-term prospects look good.

Big year. That was the most dramatic, eventful 12 months seen in the region since the financial crisis. The highs and lows were extreme, with debt and equity markets often trading in opposite directions, completely oblivious to each other’s booms or busts.

Rising China is already having a huge impact on the global economy and on global capital markets and there is little sign of this waning in the medium term. In macroeconomic terms, China simply cannot be ignored. With an economic growth rate of more than 10%, the country is set to become the world’s second-biggest economy by the end of the year.

The post-Asian financial crisis era has been one of spread compression in the debt and loan products emerging from the region, thanks largely to ever-increasing liquidity and widespread corporate deleveraging.

IFR Asia convened its first sovereign roundtable last month in Kyoto, where key players in the region’s capital markets had assembled for the 40th annual general meeting of the Asian Development Bank.

Four years ago almost to the day, Asia emerged from its SARS-epidemic scare. While this disease whipped through Hong Kong, China and South-East Asia, banking activity was at a halt. No one was flying, there was no marketing or pitch meetings, there were no mandates up for grabs. Trading levels and turnover were in the gutter.

As the Asian Development Bank prepares to convene its 40th annual meeting in Kyoto it faces a future in which its relevance might be in serious doubt and its very existence questionable. This is the natural conclusion to be drawn from forecasts that suggest abject poverty in Asia will be largely eliminated by 2020, hence rendering the bank’s basic mission redundant.

Long and cheap bilateral loans once dominated the German loan market but it has morphed into Europe's largest syndicated loan market. And German companies, despite being relative newcomers, are already among the most adept borrowers in Europe, raising large loans at competitive rates and the taking these loans out through the capital markets. And the openness of the German market means even smaller companies are enjoying unprecedented levels of liquidity. David Cox reports.

Despite a painful market correction in May this year, the outlook for global equities has remained generally positive. The explosion of merger and acquisition activity has had a significant impact on issuance, both in the areas of straight equity and equity-linked.

So long a lender, the IMF is preparing to change tack and embark on a new role – that of surveillance monitor and adviser. The IMF has lost a lot of relevance for investors because it has become an outsider.

We wrote in our last special report on India a year ago that regulatory reform would be the key to holding on to the development the country’s capital markets have enjoyed over the past few years.

Welcome to the first joint Project Finance International (PFI) and International Financing Review (IFR) Middle East Report, a review of the GCC capital markets published by Thomson Financial, the parent company of PFI and IFR.

Spain continued to dominate covered bond supply, taking 43% of last year's total of €130bn. This year, Spanish issuers of cedulas are likely to bring €60bn to market, more than double their next biggest rival, German pfandbrief. While growth is likely to slow from the blistering 25%-30% levels seen in recent years, at 15%-20% from 2006 onwards, Spain is likely to remain a key jurisdiction alongside Germany.

The combination of stable government and an improving economy continues to keep Turkey on the right path. But as the country definitively emerges from the dynamics of crisis economics and with elections in the offing, what comes next?

The combination of stable government and an improving economy continues to keep Turkey on the right path. But as the country definitively emerges from the dynamics of crisis economics and with elections in the offing, what comes next?

Germany stands at an interesting juncture. Chancellor Angela Merkel has impressed with her time in office so far, but the honeymoon is over and she now needs to tackle pressing economic reforms that will once again put Germany on a growth trajectory and reduce unemployment levels of close to four million. Business confidence is slowly picking up as companies, rehabilitated after years of balance sheet restructuring and deleveraging, are looking once again at acquisition opportunities to boost output and efficiency. This has been a boon for investment bankers and lenders, who have been starved of opportunities in recent years. Given the size of the economy, Germany already provides a sizable chunk of the investment banking fee pool, but financiers are optimistic about their near-term ability to garner a share of an increased wallet.

The derivatives markets continue their sharp growth trajectory, led by a credit derivatives sector that has brushed off the dual threats of rock bottom spreads and processing strains.

Banks continue to dedicate more resources to the securitisation business, but there is a sense that the industry is reaching a new stage in its development. In place of the all-out growth of earlier years, it is becoming more important for both the buy and sell sides to distinguish between the different segments of the asset class.

Central and Eastern European financial markets have benefited from the combination of accession-driven convergence towards global markets and a host of successful structural reform programmes in the major and second-tier countries of the former Eastern bloc.

To anyone predicting a fall-off in issuance volumes and general spread widening in the wake of the GM/Ford sagas of last year, the market's resilience will have come as something of a surprise.

China Construction Bank’s RMBS transaction was a triumph of perseverance that overcame many legal, regulatory and structuring difficulties to become China’s first such deal. The bank’s Rmb3bn RMBS has become a model for RMBS in China and is IFR Asia’s China Bond of the Year.

The urge to diversify funding sources is taking Aussie borrowers to exotic locations. Commonwealth Bank of Australia has ventured further afield than most in its determination to be “strategically opportunistic”. Hugh Chow reports on its efforts to take the less beaten path and what lies ahead.

We wrote in our last special report on India a year ago that regulatory reform would be the key to holding on to the development the country’s capital markets have enjoyed over the past few years.

The past 12 months have been an excellent time for most of Asia’s domestic bond markets and for Asian issuance in the international arena. Issuance conditions have been perhaps as good as they have ever been and for issuers from the region and outside tapping Asian investors – and the banks helping them do it – it has been a time of plenty.

Depending on your viewpoint, and choice of metaphor, the derivatives market has either dodged a few bullets this year, or continues to skate on thin ice.

The outlook for the global loan market is more positive than it has been for several years. After five years of deep liquidity pushing pricing down, tenors out and covenants into extinction, the focus has moved from refinancing to the return of M&A.

The outlook for global ECM is healthier now than for several years. The signs of recovery were plain to see at the time of the publication of last year's ECM report, but this year's resurgence of M&A activity coupled with strong secondary market performances have created conditions that do not just suit equity issuance, but actually make it desirable.

There are big plans in store for regional co-operation in Asia, although little has so far been done to secure the region against the sort of financial shocks suffered when global capital walked away in the late 1990s. While the IMF was heavily criticised as that crisis enveloped Asia, so far only piecemeal measures have been introduced to prevent a repeat of the carnage inflicted last time round.

India’s offshore presence in the capital markets has come from nowhere over the last two or three years, with the rise in volumes reflecting the rapid improvement in the country’s economic fortunes.

This year's IFR Top 250 Borrowers report comes in the aftermath of the most serious dislocation in credit markets for years. The GM/Ford downgrades to junk spooked a market that had seen one-way traffic for years in terms of credit spreads.

ABS market participants have seen one of European fixed-income's more remarkable bull runs over the past two years. Year-on-year growth across all securitised asset classes has been robust, and new investors are still being reported in primary issues.

Seemingly impervious to wider credit market woes, the Covered Bond sector goes from strength to strength – offering borrowers reliable access to cheap funding and providing investors with a high-grade substitute for government or agency debt.

Talking to bankers and analysts about Turkey in late February and early March was an odd experience. On almost every front there had been progress over the past 12 months and Turkish assets were in demand, from sovereign bonds to second-tier banks. But there was also a sense that investors were ignoring the full picture and accepting a simplistic view of what is a far more complex situation.

Talking to bankers and analysts about Turkey in late February and early March was an odd experience. On almost every front there had been progress over the past 12 months and Turkish assets were in demand, from sovereign bonds to second-tier banks. But there was also a sense that investors were ignoring the full picture and accepting a simplistic view of what is a far more complex situation.

The end of the first quarter; a time for pause, a time for reflection . . . and in the case of this year, a time of standstill in the new issue markets.

Another year means another chance for Germany to slough off its recent dismal record and make a positive impression in the capital markets. That’s the theory, and bankers have certainly started 2005 in a more upbeat mood. Then again, that was the story last year, so is there any more reason for optimism now?