Counting the cost of counterparty risk


Go back seven or eight years and there were essentially two aspects of a structured product that investors were interested in: the safety element – whether they wanted full or partial principal protection or some other variant – and the option component, which gave them exposure to a risky asset. Then came the development of an expanded set of wrapper possibilities, which meant there were three aspects of the product the potential buyer – be it a third-party distributor or an institutional inves

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