SocGen named “Equity Derivatives House of the Year”
Jan 25th, 2008 | Filed under: Institutional InvestingEarlier this month, Risk Magazine named venerable French bank Societe Generale as tops in its annual “Risk Awards“. According to the magazine:
“With one of the largest exotics books on the Street, one would imagine that Société Générale Corporate and Investment Banking (SG CIB) would be licking its wounds and coping with hundreds of millions of euros in losses [after August's market turmoil].”
A senior SocGen executive tells Risk about the importance of client relationships over short-term performance:
“We always quoted to clients and we were always present. For me, it was more important to be there for clients rather than worry about any mark-to-market losses on a few trading positions. Our reputational franchise is worth far more than any loss during one month,”
The article goes into detail about a myriad of “innovative” derivatives and structured products (volatility smiles, “CrossRoads”, structured products, vega-negative strategies…). The question on everyone’s mind: Is this innovation the key to becoming the world’s hottest equity derivatives house?
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Not lost on this reader is the irony of their dumping a massive vanilla futures position in the markets … instead of using some of their “innovative derivative strategies” to ease the pain of unwinding.