CSFB’s cancellation bond for Fifa last month proved that the capital markets are increasingly willing, and more than able, to absorb risk traditionally taken by the insurance sector. Geraldine Lambe reports on this idiosyncratic issue.

The trend for cross-asset trading has spawned a new product, equity default swaps. Supporters are championing their advantages but, says Natasha de Teran, it is likely that EDSs will have to jump through a few more hoops before take-up is widespread.
For some banks the fall in equity prices and the demise of the dot.com-fuelled equity investing culture happily coincided with an increased focus on credit risk management and the fast development of the credit markets. Those that managed to gain a lead in the rapidly growing credit sphere have reaped the rewards.

European bond investors are on the attack. They have not so far manned the barricades but they are distinctly edgy, maintaining that they are suffering from mushroom syndrome: people keep them in the dark and feed them bullshit. So they are fighting back. Their main bone of contention is that a company can be restructured with a negative impact on existing bonds and with little in the way of financial disclosure.

The European pension fund crisis could be partly resolved by persuading companies to manage their working capital better and release funds. One estimate is that European companies have about E600bn trapped in inefficient cash flow management. Release it and they can top up their ailing pension funds and a lot more besides – new acquisitions, new growth, things that could bring moribund European economies back to life.

Where are they now? Michael Philipp, former head of global asset management at Deutsche Bank, hands me a business card that reads: “Vision Fuel Services, Peachtree Street, Atlanta”, a company of which he is “principal”. Is it an opticians or a fuel supplier? “It’s my son’s business,” he says, none too helpfully.

Geraldine Lambe analyses The Banker’s Credit Risk 500 and finds the figures add up to a positive picture for corporates and financials as spreads tighten across all sectors.