Regulators are comparing ETFs with collateralised debt obligations, but do the two products share any common ground? Helen Fowler reports
If regulators were caught napping by the last financial crisis, they look determined to avoid a repeat this time around. Many, however, are barking up the wrong tree in suggesting ETFs could serve as a transmission mechanism in the same way collateralised debt obligations once did. ETF providers point out that, beyond sharing three-letter acronyms for titles, the two products have little else in common. “It is not even a vaguely sensible comparison,” said Nizam Hamid, head of ETF strategy at Lyxor, Europe’s second largest provider. “There is a world of difference between the two.” ...
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