Crédit Agricole Indosuez is considering offering weather derivatives to its clients. Pierre Valentin, head of derivatives at CPR, a 92%-owned subsidiary of CAI in Paris, said it is researching weather patterns and looking at how to price products. "This is a big job," he added, declining to reveal when it might enter the market.
Crédit Agricole Indosuez, via CPR, is not likely to enter as a market maker but it may start a trading book, according to Valentin. He declined comment on the likely size of the book. The French bank has not looked into the market previously because it was too small, he continued. There is now enough liquidity to manage the risk. The bank has not started marketing the products but said the potential is huge because approximately 25% of Europe's gross domestic product is dependent on weather conditions. Staffing plans have not yet been drawn up.
