Feeling deflated

The consensus is that interest rates are headed for zero in 2009, with even the long end of the curve looking depressingly flat. William Rhode looks at how structured products are likely to function in such an environment - from both an issuer and investor perspective - especially when considered alongside the looming spectre of deflation

"There are two types of people in the world these days - those who think the world is about to end and want to stick their money under a mattress, and those that will be unhappy about getting little or no return on their money," says Alvise Munari, head of structured products marketing for Europe, Middle East and Africa (Emea) at Merrill Lynch in London. "The question is, which camp do you belong to?"

Given the state of things, the riposte may seem like an empty salvo - from AIG to Lehman