A trade for all directions

Until last year, soaring markets gave product arrangers a simple story to sell to private banking clients, who could demand full capital protection and still expect high returns. But volatility and sky-high commodity prices mean that market-neutral trades can now be marketed heavily to private banks. By Michael Marray

Structured products providers are facing a new challenge. Keeping returns up in an environment of low interest rates on the zero-coupon element, when the options needed for capital protection have become more expensive, is exercising the brains of all providers, though private banking clients are slowly beginning to accept more fixed-coupon products rather than those with equity-like returns.

The recent convulsions in global equity markets have forced these private banking accounts to look at