Avoiding dividend meltdown

Moritz Seibert, RBS

Until last year, dividend risk was not thought to pose any major risk to the exotic books of structured products issuers. Quite the opposite, in fact – it was seen as a boon. Most dealers were long dividends as a result of structured products sold to retail and private banking clients. With dividend payouts expected to increase steadily over time, this exposure was seen as an easy way to bolster profits. “Dividends were a facile way for dealers to make money,” says one London-based equity deriva

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