Fund-linked structured products face extinction under FRTB

Global market risk capital standards carry sky-high charges for fund derivatives

A few years from now, trading book capital standards threaten to do to fund-linked structured products what humans did to the dodo more than three centuries ago: wipe them out. And just as extinctions in the natural world tend to affect other animal and plant species, banks warn they will not be the only ones feeling the pain.

“The way the FRTB is written, the consequence will be to kill the business,” says a senior equity derivatives trader at a European bank. Three other industry sources make

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