Full capital structures allow revival of synthetic CDOs

The tranching and distribution of risk on portfolios of credit default swaps is back, with issuance reaching $20 billion last year, but it bears the lessons of the crisis. Deals are simpler and more balanced, banks are retaining less risk and growth is expected to be modest

Citi: issued $10 billion in synthetic collateralised debt obligations in 2014

In the middle of a conversation about the revival of the synthetic structured credit market, the asset manager breaks off to laugh: "Case in point – I just received an email from one of the big banks, eager to discuss a bespoke tranche of credit with us, mainly derivatives."

The email also highlights a second key point about the market's return: for now at least, the deals are simpler and more standardised than they were in their pre-crisis heyday. In this particular case, as with all the deals