The value of stress-testing structured products
Regulators are pressing for more stress tests on structured products. But what does the concept actually involve? By Tim Mortimer
As retail structured products markets have grown in size over the past decade they have attracted more attention from regulators. As a result, stress-testing of structured product outcomes - or what could be thought of as a detailed suitability analysis - has become an increasingly important topic.
In the wake of the Lehman Brothers default in 2008, structured product sales and advice processes came under intense scrutiny, mainly on the issue of whether counterparty risk and capital protection
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