Tough times for bankers. UBS chief executive Marcel Rohner is under pressure to split the investment banking and wealth management arms of Europe’s second largest bank as this is touted as the best solution to the $18bn writedown that it has taken on mortgage securities.

The board of directors of Bear Stearns, one of the US’s largest investment banks, agreed to be bought by rival JPMorgan for $236m in shares in a deal that puts an end to Bear’s 85 years of independence and highlights the risks faced by banks during the credit crisis.

BMI assesses the ramifications if China’s growth slows, and Deutsche Bank identifies a funding gap in microfinance.

Any hopes of Q4 results helping to restore the battered fortunes of the top five US banks were dashed as a further wave of bad news from the economy and escalating fall-out from the subprime crisis hit confidence.

After eyeing the US municipal bond market for some time, Warren Buffet, the billionaire investor at the head of Berkshire Hathaway, is launching a new bond insurance firm thanks to the troubles of the sector’s main insurers. An industry’s nightmare is an investor’s dream.

The unauthorised trades that cost Société Générale about €5bn ($7.2bn) have opened the bank to a possible takeover, with the names of several European banks being touted as potential acquirers.

IIF predicts global slowdown but no US recession, and MGI finds combined European markets are reaching US scale.

With mayhem in the banking sector in the US, the Canadian banks that have reported at their financial year end, October 31, 2007, appear to be sailing serenely on.

The beginning of 2008 may be remembered as the time that the dynamics of international finance shifted dramatically as the sovereign wealth funds of a handful of developing economies rode to the rescue of some of the developed world’s largest financial institutions.