Japanese banks recycle risk into Europe

Last summer, banks in the Japan structured products market were hit hard by moves in volatility – but some banks saw this as an opportunity to recycle risk to European pension funds. Viren Vaghela reports

May to September last year was a tricky time for firms involved in Japan's structured product market, after strong success in the early part of 2012 with a rising Nikkei and subsequent increased appetite for equity-linked securities autocallables. The story was repeated in South Korea, which saw record issuance of equity-linked products in 2012 reaching more than 47 trillion won ($43 billion), according to data provided by the Financial Supervisory Service in Seoul.

The equity-linked