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The new issue markets can be open one day and shut the next. And, in an environment of high spread volatility where investors can often find a better bargain in the secondary market, there can be no room for error.

Chris Coles, head of acquisition finance at Barclays Capital, says that in January his bank "looked at more deals than we have looked at in any previous month", which appears to be proof positive that the UK corporate restructuring story is alive and well.

Corporates have become the darlings of the European bond market. New issuance is running at record highs as investors look for paper yielding decent spreads at a time when government bond yields are low.

While the European municipal market is starting to evolve, and bonds from large cities and regions offer an asset class with near-sovereign risk, there are thousands of municipalities which are too small to issue on their own.

Any doubts about the long term commitment of the Labour government to eventual adoption by the UK of the single European currency were dispelled towards the end of February.

More broadly, how will the euro and the development of a pan-European equity market affect the UK stockmarket? What is the outlook for new issues? And what future patterns in share ownership and trading can be anticipated, at the institutional and retail levels?

But there are other changes afoot as well. Continuing consolidation in the bank industry is reducing capacity in the market -- already reduced by the withdrawal of many Japanese and other Asian lenders -- while risk awareness ampng lenders has been heightened by last year's Russian shock. In addition, banks are taking an increasingly hard-edged approach to relationship banking, particularly with regard to ancillary business. And the expanding European corporate bond market, in sterling and euros, is creating rival financing opportunities for many stalwarts of the loan market.

Although Italy may be increasingly snapping at its heels, Spain is still widely regarded as the country which has done the most over the last few years to act as the standard bearer for European sub-sovereign debt as an asset class. Since the Autonomous Community of Madrid set the ball rolling in June 1992 with a 12 year yen issue, five other authorities - Catalonia, Valencia, Andalucia, the Basque Country and Galicia - along with the cities of Barcelona and Seville have all followed suit by launching international bond issues.

In the first half of 1999 investors hungry for sub-sovereign paper will have a rare chance to welcome a clutch of Italian municipal issuers to the capital markets. Buyers can look forward to Euro-MTN programmes for the province of Naples and the city of Rome in March, followed by another programme for Florence, while Venice and Milan are also preparing to issue.

If federalism means diversity, then this equation is more then proven by Germany's Länder, who continue to disagree about their approach to international capital markets.

Leading UK fund managers are rushing to put together high yield funds, believing that the asset class offers a highly attractive risk-return profile. And new investors are coming into the market all the time, from both sides of the Atlantic.

Heterogeneity is one of the biggest problems facing the European municipal market, perhaps second only to the lack of liquidity. Government structures and bankruptcy laws differ between countries, and there is little uniformity in the mechanisms which guarantee local government debt.