(ANSA) – ROME, APRIL 26 – Bank of Italy’s beacon on the risks for families from financial instruments ‘certificates, especially the riskiest ones which amount to 20 billion euros’. In its periodic monitoring, the central institution underlined how “at the moment the financial stability risks deriving from the certificates appear contained; this does not mean that the losses that the holders could suffer in the event of an unfavorable scenario could be significant in some cases” . According to the bank, “securitisations, self-securitisations, additional tier 1 subordinated bonds (AT1, also known as contingent convertibles, CoCos) and certificates can currently be considered as potentially risky for financial stability”.
The values of the first two types of instruments, the monitoring underlines, increased until 2020 following, respectively, the sale of impaired loans by the banks and the use of securities deriving from securitization transactions in refinancing operations at the Eurosystem; however, they are currently at levels below the highs reached in the past and have not recorded particular increases in 2021. The volumes of AT1 bonds do not appear high in absolute terms and the absence of these instruments among the assets held by banks excludes possible contagion risks linked to any impairment of their value. The risks to financial stability deriving from these three categories of instruments can therefore be considered contained “.” Certificates are securities whose value can undergo large variations in relation to changes in the price of the underlying financial instruments. Since mid-2020, the total value of certificates in circulation in Italy has remained almost stable, just over 40 billion; excluding those with totally or partially protected capital, about half can be considered potentially very risky for the holders “. (ANSA).
Source: Ansa
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