Offers of free-money trades generally set alarm bells ringing among seasoned investors, and rightly so. Yet according to some, banks have begun hawking a breed of easy money trades at terms too attractive to resist.
These products take the form of options that offer solid returns at low, or sometimes near-zero risk. Why? Because they are designed to help banks meet the liquidity coverage ratio (LCR) – one half of the Basel Committee on Banking Supervision's post-crisis liquidity requirements