Structured interest rate instruments are taking over from credit derivatives as the flavor of the moment in Italy because of increased aversion to credit risk in the wake of the Parmalat debacle. The difficulty in placing credit products is partly due to the Banca d'Italia's regulatory crack down in December, say marketers.
The rates business has been growing across Europe
(DW, 4/19), but the move toward rates-based products is particularly pronounced in Italy, according to David Ishoo Mirzayoo, head of the derivatives and solutions group at Société Générale in London. He added, however, that "I wouldn't rule out credit products in Italy."
One product that has taken a hit in Italy is CDOs. "After Parmalat, the market has realized there is a problem with the overlapping of CDOs," said one Italian marketer. He continued that securitizations of ABS are proving popular because they are more diversified.
