Fraenkel believes the oil risk management sector is “under banked”, in that there are very few financial institutions offering specialist oil services. “If a customer wants to do an energy hedge, he will typically have to talk to the interest rate or FX desk at his bank - which may not have proven expertise in the energy area.”
He says customers will prefer to deal with banks, rather than pure energy companies, citing a “comfort factor” afforded by reputation, regulation and a strong balance sheet. The group aims to capitalise on Rothschild’s existing customers as well as seek new clients.
The week on Risk.net, August 4–10Receive this by email