RBS Exit Highlights Cost Challenge for Issuers

Declining profits and tightening regulation of structured products are prompting banks from Royal Bank of Scotland Group Plc to Rabobank Groep to quit the business.

RBS last week became the third European bank to close its structured products operation for retail investors since March, citing high capital costs and expenses for the securities. Dutch lender Rabobank Groep and Switzerland’s Basler Kantonalbank said they closed their businesses because new regulations for selling the products will increase costs and decrease demand.

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