Coupon clamp-down on Italian retail products

The Banca d’Italia is considering a plan to cap coupon payments on structured investment products targeted at retail investors, according to market sources. Coupons would be limited to no more than double the one-year Euribor rate, which currently stands at 3.03%.

The Banca d’Italia has apparently become concerned about investment products that offer high potential yields, but carry relatively high risks, such as pay-outs linked to the performance of baskets of debt or the performance of single shares or relatively small baskets of shares. Such products have been especially popular in Italy and Spain this year as interest rates have fallen.

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