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Has Islamic finance come of age with Goldman Sachs’ sukuk plans? It's hard to know. But the bank could help the market by being a bit less mysterious about the motivations behind its highly surprising new direction.

—Andrew Shrimpton, a member in regulatory compliance at Kinetic Partners in London, in response to an E.U. agreement to ban so-called naked credit default swap trading on sovereign debt.

Piece by piece, liquidity or collateral swaps are starting to get the attention they deserve. The FSA, never backward in coming forward, has apparently blocked transactions already, following publication of new guidance on the subject earlier this year. Market participants report large and growing interest from parties on either side, and structures are rapidly evolving.

Capital markets are crying out for a shiny new funding machine free of the problems that have beset the conventional model. But Islamic finance must choose a different path from the one it has previously followed if it hopes to assume that function and wire in sustainable growth.

Asia’s secondary bond markets have broken their rout over the last few weeks, but few borrowers have had the stomach to attempt a new deal. That could change this week. The Republic of Indonesia is considering launching a benchmark issue and bankers should carefully watch the transaction for hints about where the market is going.

The dilemma of the eurozone crisis is not that there are no solutions, but that the right ones are so politically unpalatable as to be moot. If Europeans want to fix the crisis and keep the euro, then a dose of fiscal union, if only for a short while, might be the only way out of this mess.

First Sakrileg, now Sacrilegio. Covered bond purists have had an unsettling few weeks. The cry for structured covered bonds is not only getting louder but has moved across the covered bond bastion of Germany into Italy.

Secondary spreads in the EFSF’s bond issues have taken a beating recently. French spreads have also made their way out to around 1% over Germany. But if you can handle short term scares, this might be the time to take down French and EFSF paper.

US money market funds have retreated from eurozone bank debt, but financial institutions in the single currency have carried on funding regardless. With an already limited pool of borrowers, the funds may find they miss eurozone commercial paper more than the banks miss their dollars.

The option of saving for retirement through structured products hasn’t received the most positive press over recent years.

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The 2011 Global Derivatives Awards is taking place at the Four Seasons Hotel in London. Join us here as we live blog the winners, the speeches and all the behind the scenes chatter from the event. Stay tuned for constant updates.