Structured Products - Volume 6/No 4

Going it alone

Jyske Bank, based in Denmark, has traditionally distributed products that have been created by large banks. However, after the financial crisis saw consumer confidence in those banks plunge, Jyske has had to step in to operate as both issuer and…

Maintaining interest

Axa IM has found its own ways to reduce counterparty risk and overcome the problems caused by low interest rates. It is now confident there will be a return to structured products. Clare Dickinson reports

Wrestling with correlation

The correlation risk inherent in most structured products represents an ongoing headache for manufacturers. While new regulatory proposals would affect how much risk banks keep on their books, market dynamics are at play, especially the rise in…

WisdomTree bears fruit

WisdomTree has made its name by offering alternatives to the standard ETF fare, with a suite focused on efficient weighting, access trades and active management. Now it is poised for yet more growth, and expects to start capturing assets previously…

Collateral replacement

At the height of the financial crisis, manufacturers were quick to mitigate mounting counterparty risk concerns by deploying products issued by collateralised special purpose vehicles. But now, as the yield junkies return and retail appetite for…

The Thais that bind

The Bank of Thailand relaxed its regulations covering the use of derivatives towards the end of 2009. While retail investors are already allowed to buy structured notes and deposits linked to some foreign variables, the relaxation of rules has provided…

Capital increase

Exposures to counterparty credit risk have been scrutinised by the Basel Committee on Banking Supervision, which published proposals designed to increase capital requirements in the middle of December. The measures will be completed and implemented by…

The lure of click-to-trade systems

Growing demand from high-net-worth investors for bespoke structured products is leading to smaller deal sizes. As a result, arrangers are planning to increase their use of automated systems to mitigate the costs of delivering and servicing small trades…

In search of the perfect match

Demand from pension funds for structured products has slumped during the financial crisis due to the great sell-off of equity risk. But the downturn has raised awareness of how derivatives can help match assets and liabilities, a strategy that is on the…

Market snapshot

Tim Mortimer of Future Value Consultants looks at the pricing issues for structured products in different markets and provides his trade of the month

Interest rates call

HSBC is offering US investors a 10-year investment in interest rates that pays 7% in year one and potentially as much in following years. The product is wrapped in a certificate of deposit, but investors may lose out if HSBC exercises its call at five…

The callable countdown

JP Morgan has launched a callable countdown constant maturity swap range-accrual certificate of deposit that pays a coupon dependent on the proportion of days the CMS rate is within a 0-6.25% range. The tenor is 15 years and the product benefits from…

UK accumulation

Barclays is offering an accumulator product based on the FTSE 100, with lock-ins for every 15% rise in the index subject to a 60% cap. If the index does not trade above a 115% strike level and the 50% protection barrier is breached, capital is not…

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