The speed of development of derivative structures and the increasing range of investors getting into the instruments has banks questioning how they organize internally. But, no consensus is emerging on the correct model, according to panelists.
Mark Brickell, ceo of Blackbird Holdings and former ISDA chair, put the question of whether there would be any business changes to the panel but did not get a detailed answer. Kenneth Tremain, head of North American interest-rate trading at Citigroup, said his group has looked into developments in equity and fx and expects to see changes in the way Citi sells to clients. But, he noted it is still in the early phases of the analysis.
Justin Kennedy, managing director in pacific equities Asia at Citi, added the trend for merging credit and equity desks is also connected to product development. He noted, "The various players seem to be adopting different business models: there does not appear to be a one-size-fits-all answer." He added, "It will probably be a couple of years before we are able to discern what the most appropriate way of meeting the challenge is."
