Ask the Experts: Structured Products and Counterparty Risk


Question: I am wondering what the panel make of the term ‘counterparty risk' when it comes to the security of Structured Products?

Answer: Gary Dale - Investec With regards to Structured Products the term "counterparty risk" relates to the risk associated with the provider of the underlying deposit or security. With Structured Deposits, it relates to the deposit taker and with Structured Investments it relates to the issuer of the underlying security or note. Structured Deposits are protected by the Financial Services Compensation Scheme (FSCS) up to £50,000 per eligible claimant per institution however Structured Investments are not therefore counterparty risk tends to be used more in conjunction with Structured...

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