News Column

Banks banned from 'CoCos'

August 6, 2014

BRITISH banks are to be banned from offering complex hybrid debt known as contingent convertible bonds, or CoCos, to the mass retail market from October, the Financial Conduct Authority has said.

The bonds can be written off or converted into equity if capital at the bank which issued them falls below a pre-determined trigger level. The FCA's Christopher Woolard said investors may be tempted by CoCos offering high headline returns but warned "they are complex and can be highly risky".

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Source: Herald, The (Scotland)

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