Counterparty risk has been at the fore of investors' mindsets since the Lehman Brothers debacle last September. But how has this shaped the structured products landscape and has it had any positive effects?
The collapse of Lehman Brothers on September 15th last year sent shockwaves across global financial markets, which are still reverberating through the structured-products industry. Structured products hedged by the bank's paper were left with unhedged positions, forcing providers to search for new counterparties to salvage the products. The Lehman debacle accentuated the significance of counterparty risk in structured products, along with many other types of investments, and has since featured prominently in investors' mindsets when selecting products. The impact of the event has shifted ...
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