Merrill is thought to be the third major derivatives house to combine its structured products desks, with Goldman Sachs and Dresdner Kleinwort Wasserstein already making the jump. Rivals said this is something that most firms are starting to look at because of the increased demand for hybrid products, such as equity-default swaps, correlation products and multi-asset class rainbow options, that draw on expertise across departments.
"I'm surprised they have merged marketing before exotic-products trading [because] marketing usually has bigger egos," commented one product marketer at a rival house. He noted life may be complicated for the newly merged group because it will now sit between two entirely separate trading entities. Rivals said another drawback could be that the joint marketing group would not have the depth of trading and research support behind them and for this reason debt or equity specific marketing groups may not be competitive in pricing or at the cutting edge of product innovation.
