The changing landscape of structured products

As lessons from the credit crunch are learned, investors are assessing all risks, guarantees and government protection

Like many parts of the financial world, the structured product market is a very different place post the collapse of Lehman Brothers last year. Pre-credit crunch, most products offering capital protection were effectively seen as guaranteed, as the firms backing them were typically blue-chip investment banks. But with the collapse of Lehman, and Bear Stearns also teetering on the brink before JPMorgan stepped in, this counterparty-risk issue has moved right to the forefront. With a structured investment, most of the initial capital is used to buy a zero-coupon bond from these counterpar...