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Tony Jansz has investment banking coursing through his veins – but given the chance he would rather focus on his geek credentials.

The US market still represents the largest and most liquid source of equity funds, and figures show that Asian issuers are increasingly getting the message.

The year 2000 has been a tough one for the highly rated public sector banks of Germany. The high spreads paid by corporate issuers, the pick-ups offered by triple-A ABS, and the arrival of Freddie Mac in euros have all put pressure on the funding levels sought by the likes of KfW and L-Bank. And while issues in currencies such as sterling and yen have provided a refuge from the difficulties of the euro market, analysts suggest that some of Germany's top credits may have to reassess their ambitions.

The debt capital markets divisions of investment banks are gearing up for an expected boom in issuance from German corporates. For although investors are treading carefully after taking hasty steps into the new credit market, trends that meet the needs of both the buy and sell sides of the bond market equation are emerging.

After several false dawns, investment bankers in Frankfurt are optimistic that the promised riches of the euro era are there for the taking. With German corporates keen to learn the ways of the bond and equity markets, and the government making good on assurances that structural economic reform would finally occur, the ingredients for more developed capital markets in Germany and Europe are falling into place.

Germany's Neuer Markt has not escaped the volatility that has rocked stock markets in 2000, but bankers nonetheless detect a maturing of the Neuer Markt, with most of this year's new issues continuing to trade above their IPO price due to more realistic pricing of new offerings. There is also a silver lining, bankers say, to the cloud surrounding Gigabell's filing for insolvency, as greater selectivity should be the result of this and future corporate failures. Meanwhile, with investors proving resilient to this year's turbulence, the Neuer Markt's contribution to Germany's evolving equity culture is set to remain as strong as ever.

Long undermined by discussions over the future of the state guarantees they enjoy, the spreads of Landesbank debt were this year hit by more bad news, as the Banking Association of the European Union (FBE) issued its strongest attack to date on the privileges of the German public banking sector. And while analysts suggest that fears over grandfathering are being overplayed, they warn that Landesbank paper is set to remain unloved.

Although German ABS/MBS volumes may have fallen in 2000, bankers involved in the asset backed market

Many bankers believe that as the growth of the European government bond market slows, there will be an opportunity for sub-sovereign issuers, including those in Germany, to attract investors. However, those hoping that the Länder might prove willing substitutes have so far been disappointed.

Germany's mortgage banks have faced many challenges this year: the turbulent credit market, the weak euro, competition from new European Pfandbrief style products. But while these were challenges that the Hypothekenbanks could perhaps predict and plan for, one major threat came as a surprise: the German banking regulator's proclamation that mortgage banks could be taking dangerously high interest rate risks. And while the Pfandbrief community has responded diligently to the scrutiny of analysts, investors and regulators, further challenges lie ahead.

"Three things conspire to make Germany one of the most attractive markets in Europe for on-line banks," noted a recent report published by Credit Suisse First Boston (CSFB). These are "a high level of internet penetration, a tradition of electronic payments and a fragmented market dominated by the public sector."