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This article presents an interview with Bob Hawke, former Australian prime minister, about the Australian financial markets, as of 2004. With regards to the bias in the Australian Reserve Bank in comparison with the U.S. Federal Reserve Bank, Hawke said that they are operating in different stages of the economic cycle in different economic circumstances. In Australia, Hawke thinks that Ian MacFarlane, Governor of the Reserve Bank of Australia, and his team at the Reserve Bank have done a good job, as again the country has had a sustained period of economic growth. About the Australian dollar, Hawke said that one wouldn't want to see the Australian dollar going to high as it's tough for exporters. Fortunately, the country's mineral exporters had such a boom in prices. Regarding the bilateral trade agreement with the U.S. in connection with the Australian industries, Hawke doesn't think that there will be a U.S.-Australia free-trade agreement. He is not against bilateral free trade agreements in any circumstance. But his concern has been that he thinks that their resources ought to be concentrated upon trying to ensure that the do-ho around is going to produce results, because, by definition free trade agreements can not address the most critical issue in terms of international free trade.

This article focuses on the factors that are crucial to the efficiency of sub-custodians. Sub-custodians are very market-specific. Unlike institutions that cater to the global market, what makes a sub-custodian effective in one country may not apply in another. Key operational skills and the ability to deliver straight-through processing are taken for granted. The differentiating factor is the depth and breadth of its knowledge of the local market. Knowledge of fund flows and of local practices is crucial. In cash and foreign exchange-restricted markets such as Taiwan and Malaysia, a sub-custodian that is able to lobby the regulators is a step ahead of its competitors. Global custodians, who are often the major clients of the sub-custodians, want someone who can take up industry issues for investors and speak to regulators on their behalf. This is especially true in China, which is poised to open its A-share market to foreign investors. Those coming from markets such as Hong Kong or Singapore, which require minimal paperwork, openly confess to finding custody work involving Shanghai and Henchmen very daunting. According to Michael McCarthy, vice-president and head of Asia-Pacific Regional Effort Management, they select the sub-custodian bank that displays the most sophisticated securities processing expertise and the most comprehensive knowledge of the local market.

This article discusses the results of a survey regarding the custodial services offered by several banks in Asia. Custody, as with most other services provided by banks, is constantly re-inventing itself to keep up with the changing marketplace. Major global custodians cover every possible aspect of investing. From compliance management to derivatives clearing, they have to compete with institutional investors and fund managers. As markets become more global, services are increasingly specialized. Responses to the poll reveal positive points about custodial services, with added benefits for clients. Among these benefits: performance measurement, compliance monitoring, risk management and securities lending. Such services help reduce the third-party costs that clients must pay and help amplify their portfolio returns. According to Steven McCullough of JPMorgan, a custodian's size and reputation go hand-in-hand with technology, flexibility and tailoring. The poll also found discrepancies among agent banks as to what they believe constitutes core custody. Cross-border investors, in particular, want their custodians to provide risk management, proxy voting, corporate actions, collateral valuations and securities lending. INSET: Best of global, best of local.

This article focuses on the efforts of private bankers to adapt to the changing needs of investors. Market volatility since the massive crash in equities at the turn of the century has fundamentally changed investor behavior. According to the Boston Consulting Group, investors are focusing increasingly on absolute returns instead of relative performance. Gaining the confidence of clients is no easy task in the wake of the many institutional and corporate scandals that have rocked the markets in recent years. According to Kathryn Shih, head of UBS Wealth Management, a key characteristic of Asian clients is their willingness to try new things. As far as preferences towards portfolio management are concerned, it is true that European clients are more willing than their Asian counterparts to hand over responsibility for asset management entirely to a fund or portfolio manager. Asian investors are very knowledgeable of markets and instruments. They are willing to experiment and so willing to learn. In Europe, a lot of old wealth is already professionally managed, whereas in Asia the approach remains more hands on. Both groups are sophisticated but they demonstrate different kinds of sophistication. According to Kam Shing Kwang, head of investment management in Asia at JP Morgan since 1998, wealth management is not a new concept for Asia's richest. But a subtle change in the degree to which the ultra high net worth families with whom JP Morgan deals exert control over their assets. Two of the key factors in the change have been market volatility and the growing need to explore alternative investment sources. INSETS: Relationships matter as profiles change;Money doctors see signs of life.

This article deals with ways of defining wealth. Bankers have a practical way of defining wealth. If you have U.S.$1 million or more in investible assets, you qualify as what is described as a high net worth individual. And if you have liquid financial assets averaging more than U.S.$30 million, you become an ultra high net worth individual. In Asia, wealth tends to be measured in aggregate family terms. Relationship managers at private banks look at high net worth families, rather than just individuals. Wealth is a moving goalpost. To qualify for the Forbes 400 rich list in 1966, you had to cross the U.S.$415 million threshold. Raising the wealth bar has not resulted in fewer people qualifying. In fact, the number of rich people in the world is growing, especially in Asia. Canadian research organization The Fraser Institute draws a correlation between prosperity and geography in its 'Economic Freedom of the World: Annual Report 2003.' The survey defines the fundamental components of an economically free environment as the ability to execute personal choice and voluntary exchange, freedom to compete and adequate protection of people and property. Of the more than 120 nations surveyed, Hong Kong and Singapore, two of Asia's wealthiest nations, hold the top two positions respectively. According to the report, both countries can support a large wealthy elite and a substantial super-wealthy circle.