“In the accounts of Italians, 50 billion securities are at risk.”

The number of risky securities held in savers’ portfolios is on the rise. At the end of last year, Italian households directly owned about 50 billion “complex debt securities”, up 11 billion compared to the previous year. These are the securitizations, certificates and secondary bonds such as “At1” which suddenly became famous last March after a crash Credit SuisseWhich yellowed its control, causing huge losses to those who own it. They are all financial instruments, according to a note from the Bank of Italy, that expose holders to “the risk of significant losses in the event of an unfavorable scenario.”
The “complex” assets held by Italian savers “represented about 18% of all debt securities owned by households”, down from 20% last year, and 1% of their financial wealth in September, the Central Institute explains in its survey. 2022. “The increase is attributed – Bankitalia continues – to certificates (near pure bets, which grew by 11 billion to 37), which, along with secondary and structured bonds, are the most complex securities spread.”

At the end of 2022, debt securities were outstanding in Italy with a value of approximately 2,440 billion, of which 12% (303 billion) “were represented by instruments that could be considered complex.” Of these, the most popular were securities (accounting for 38% of complex securities, 115 billion), subordinated bonds (29%, 87 billion) and certificates (17%, 52 billion). “Based on the dynamics of traded volumes, AT1 securitizations and subordinated bonds (8% of complex securities, 25 billion) and certificates can currently be considered as potential financial stability risks,” the Bank of Italy continues.

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In particular, the outstanding volume of certificates – financial instruments that replicate the performance of underlying assets such as a basket of stocks – “increased significantly in 2022”, and households own most of them (70%). The central bank notes that the value of these instruments “may be subject to significant changes” and therefore “the Bank of Italy will continue to pay particular attention to the development of this market”. In fact, certificates are securities “the value of which can be subject to wide variations in relation to changes in the price of the underlying financial instruments,” he communicates via Nazionale, who adds however: “For the time being, the risks to financial stability arising from certificates appear to be contained. ; This does not mean that the losses that can be incurred by the owners in the event of an unfavorable scenario may be significant in some cases.

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