RBS cash equities exit could hike hedging costs
RBS will have to pay more to hedge vega from its equity derivatives business after losing offsets provided by cash, rivals say
Royal Bank of Scotland's (RBS) decision to exit cash equities will make it more expensive for the bank to hedge its structured products book, rival dealers claim – and could also undermine its equity derivatives flow business.
The bank announced a restructuring of its global banking and markets business on January 12, involving the closure or sale of its cash equity business. RBS will continue to offer structured retail products and equity derivatives. But that means the exposures resulting from
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