BNP Paribas has pulled out of the weather derivatives market. "The long-term profitability of this business is not at a level that our shareholders necessarily expect," said Jonathan Mullen, head of corporate communications at BNP Paribas in London. He was unable to give details of the French bank's profitability projections. The move will not result in any redundancies, he added.
"We're going to be honoring all existing contracts," added an official at the firm in London. The French bank will execute one-off transactions if approached by a customer but will not actively market weather derivatives business. The official referred further questions to Denis Autier, head of global risk solutions at BNP Paribas and co-chair of the European committee of the Weather Risk Management Association. Autier was traveling Monday and could not be reached for comment.
BNP Paribas had planned to set up a weather derivatives operation in New York (DW, 1/7/01).
