By Charlotte GAUCHON
16 March 2025
Sophisticated financial arrangements, often referred to as financial engineering, have become commonplace in the banking world. While they offer opportunities, they also entail significant risks, both for customers and for lending institutions. It is therefore essential to understand the mechanisms involved and the scope of the associated banking liability. Definition and context of financial engineering What is banking financial engineering? Banking financial engineering refers to all the sophisticated techniques and arrangements developed by financial institutions to meet their customers' specific financing objectives. The aim is to create tailor-made products that combine different financial instruments to optimise taxation, control financial management, maximise returns or reduce financial risks. These packages are generally characterised by their complexity and the combination of several interdependent contracts, sometimes in an international context. At the heart of this practice is the creation of...
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