TD Securities is closing its structured interest rates derivatives business in Europe as it has failed to become a viable standalone business. The business became a standalone after exotic derivatives were shuttered earlier this year (DW, 5/2). "It is not meeting risk and return objectives," said Jeff Keay, spokesman in Toronto, adding the function will be wound down over the next two years. The London desk is headed by Martin Walton, vice chairman and regional head for Europe and Asia, who declined comment.
Structured interest rates will now be run solely out of North America, but flow credit and foreign exchange will continue to operate around the globe, including in London. Keay declined to name the number of staff in the European interest rate team. One industry official said there are around 10 marketers and seven traders, with some traders having been absorbed into the rates group when structured credit was shut.
Bob Dorrance, vice chair of wholesale banking, cited escalating compliance costs when TD closed its advanced equity products business, cut back the credit client business to Canada and shelved expansion plans in Asia. A former trader at TD said the closure of structured rates is in line with the firm's focus on cutting capital intensive businesses.
