In the firing line

With the Keydata debacle, have investors' concerns switched from counterparty to provider risk?

Structured products are selling like hotcakes, with sales hitting a record £9.7bn in 2008. Yet there remain huge concerns over these investments which have been fuelled by the  Keydata debacle. Coming so soon after Lehman collapse left thousands of investors out of pocket, its demise has provided ample ammunition for critics. It has also shifted the focus of concern from an almost exclusive preoccupation with counterparty risk, to the risks associated with the provider and third parties. Keydata was one of the best-known designers of structured products in the country, entrusted to ru...