"Bond Market In Russia Faces Major Crunch," by Craig Karmin, Wall Street Journal, 14 May, p. C1.

"EU Nears Accord To Back Russia In Bid for WTO: With Europeans Onboard, U.S. Still Needs Convincing In Membership Campaign," by Scott Miller and Guy Chazan, WSJ, 14 May, p. A10.

No danger of a state financial collapse like 1997, this time it's the corporate bond market that's fallen on hard times, meaning companies are having trouble floating debt. This troubled market follows similar downturns in Brazil and Turkey recently.

Too much of the corporate bond market in Russia right now qualifies as junk bonds, or poor grade investments. That scares off investors because, unlike in the case of the government where the IMF stepped in, this is no one backing these investments if the companies fail

Improving that overall climate for private-sector debt is crucial, which is why it's so important that Russia, after ten years of trying, finally get into the WTO sometime soon. Getting inside the World Trade Organization would put a lot of new pressure on the corporate sector to clean up its actóaccounting wise. And that would improve the climate for corporate debt over time.

The EU is all set to support Russia's latest membership bid, but the US is holding things up by demanding more market access concessions than the Europeans typically do, especially for foreign direct investment in banking, insurance, and telecommunications sectors. Let's hope US Trade Rep Bob Zoellick makes this deal come about as soon as possible. We don't need Russia's corporate bond market invariably putting the squeeze on its sovereign bond market over the next few months and years.