Germany takes the structured products industry very seriously

Germany has long been a leader in the structured products industry, and the first quarter of 2022 has seen the country solidify its frontrunning position. This is evidenced by the impressive sales volumes and issuance numbers that have been reported for the period. Some 5,757 structured products worth an estimated €4.3 billion were issued on the German primary market in the first quarter of 2022. Sales volumes increased by 96% year-on-year while issuance was up 16% (Q1 2021: €2.2 billion from 4,951 products).

This shows that there is a growing demand for these types of financial products in Germany and that investors are increasingly turning to structured products as a way to gain exposure to specific markets or sectors.

One of the key factors driving Germany’s success in the structured products industry is the high-quality journalism and data that is available to investors and market participants. This is a reflection of the significant investment that is made in this area, both by the financial institutions that issue the products and by the media companies that provide coverage of the market. In order for investors to make informed decisions about structured products, it is essential that they have access to accurate and reliable information about the products, the underlying assets, and the market conditions.

Another factor that has contributed to Germany’s strong performance in the structured products industry is the presence of a large and sophisticated investor base. German investors are known for being well-informed and highly analytical, and they have a strong appetite for innovative financial products. This has created a favorable environment for structured products issuers, who have been able to develop products that meet the specific needs and preferences of German investors.

The issuer groups active in the market are a mixture of large German financial institutions and European/US investment banks. This diversity of issuers is beneficial for the market, as it allows investors to choose from a wide range of products and to diversify their portfolios. Additionally, the involvement of foreign investment banks in the German structured products market brings a level of international expertise and perspective, which can be beneficial for the development of the market.

However, it is important to note that while Germany is a leader in the structured products industry, it is also a highly regulated market. The German government places strict rules and regulations on the issuance of structured products, which is intended to protect investors and ensure that the market operates in a transparent and fair manner. This can make it more difficult for issuers to bring new products to market, but it also helps to maintain the integrity of the market and to prevent fraud and misconduct.

In conclusion, Germany has a well-established position as a frontrunner in the structured products industry. The strong performance of the market in the first quarter of 2022 is evidence of this. The high-quality journalism and data available to investors, the sophisticated investor base, and the diversity of issuer groups are all factors that have contributed to Germany’s success in this market. However, it is important to remember that this is also a highly regulated market, which can make it challenging for issuers to bring new products to market but also helps to ensure that the market operates in a transparent and fair manner.