Indeed, such bonds are a roulette wheel for the rich
Use your account to access the website through one of the following servicesSelect the service that you have already subscribed to: No risk, no reward. This is an ideal slogan to describe a financial instrument that is rapidly gaining popularity among European investors. This new version of coconut bonds has already been aptly called"flash Bonds deaths". Schematically the essence of the tool can be described as follows: The buyer takes out bonds below the high annual interest rate, but if the Bank runs into financial problems, suddenly everything can be lost. Risks here, the winner of the securities, the Issuer, in this case the Bank, is the winner of any development of the situation. Traditional"coconut"bonds are described as securities that are converted into shares in case the Issuer has problems with liquidity or solvency. These bonds are actively issued by banks at the end of the year. As for"sudden death bonds", this is a kind of"coconut"modification of bonds that attracts wealthy clients as a high-yield financial instrument. In fact, in the world of large companies, the winner is often the one who knows the risks and is not afraid to take them. Therefore, they risk those who see the meaning of their investment as much as possible faster. Let me remind you that the so-called"coconut"bonds are converted into shares in the event of a loss of capital by the Bank. In other words, the issuing Bank itself issues bonds in the form of bonds with higher yields than ordinary debt. For the Bank, this type of bond is a kind of guarantor that does not suffer failures. For example, one of the oldest Swiss banks recently issued such bonds, which will be supported by the country's tax authorities.
Thus, the advantage is twice as great for both the Bank and the tax authorities, because the Bank's capital is replenished without any risk.
According to the report, demand for"coconut"bonds has already reached twenty-two billion dollars, while the volume of issuance was two billion dollars. In my opinion, investing is similar to participating in a pyramid scheme, where the first depositors have an approximate fortune, the second receive an average income, and the last remain without anything. That is why there are no legal ways to return it contributions can not, because, as before, there is a risk of volunteering. However, many financial analysts believe that if the newspaper begins to bring losses to investors, then it will have a lot of room for litigation. In the case of this Swiss Bank, whose assets amount to more than a trillion dollars, two - thirds of the issues were bought by asset management funds, the rest by commercial banks. In exchange for"Cocos", the Bank announced debt obligations worth more than a billion euros. But in this case, the risk justifies the means. At the same time, I note that such instruments have already been issued on the Dutch and British markets before, and I am still considering the possibility of adding capital. For the first time, this scheme was tested by a Belgian Bank, and then by banks in Switzerland, Sweden, Denmark and the United Kingdom.
Then they are also under threat
The financial authorities of these countries supported the creation of such instruments, since the rapid recovery of banks capital is beneficial and beneficial to the regulator.
The Belgian Bank annually sold one hundred percent of its bonds. But first of all, the second largest Swiss Bank receives from the sale of"sudden death Bonds". Then, in the year of the financial crisis, the Bank suffered losses of more than two billion dollars as a result of the subprime mortgage crisis.
It can be used to buy risky securities in the real estate market.
Let me remind you that in the autumn of the same year, a number of Swiss banks, whose clients are wealthy European citizens, got back on their feet with the prospect of losing about billions of dollars. The lawsuit came into force with tax agreements with Germany and the United Kingdom. Analysts then say that for up to a year, many foreign clients can withdraw their money from banks. In General, the situation was related to Swiss banks. Thus, Germany and the United Kingdom tried to combat the laundering of illegal income of their citizens who invested their money in Swiss banks. In General, banks in Switzerland, although it is known that the Saint keeps the secrets of deposits, has recently been at the center of scandals, fraud or collusion between a customer and an employee of the Bank. For the first time in the history of Swiss banks, the Unified state revenue Agency also asked banks to publish the names of depositors and threatened many employees with criminal prosecution. Since the beginning of the financial crisis, Swiss private Bank managers have lost twenty-five percent or more of their assets, amounting to billions of francs. The struggle of the governments of the main countries with tax havens has further worsened their situation.
I must say that the departure of foreign clients from Swiss banks, of course, put their lives at risk.
For example, the Bank has spent millions of francs on resolving conflicts with UN States and Germany.
Another major Swiss Bank, which is also linked to the tax fraud scandal, lost millions of francs as a result.
When then both big ones the Swiss was recognized by a Bank that helped protect the money of foreign clients from taxes. In order for banks in Switzerland to get a clear picture of themselves, and the introduction of a new type of"coconut"bonds into circulation is one of the symptoms of issuers confidence in their positions. As for risks, if the Bank is stable and the client is rich, then the risk is justified in any case for both the Issuer and investors. There can be no other option. Portal-database of private newspaper ads"Zapad", business directory of cities of Kazakhstan and Switzerland, news, real estate, electronic versions of a number of publications, a collection of recipes. All comments and suggestions are accepted.