Japanese banks and securities firms review structured bond sales

Tokyo, Sept. 18 (Jiji Press)–A number of Japanese banks and securities firms are reviewing their sales of structured bonds, a risky financial product involving a complicated combination of derivatives, following customer complaints who were not sufficiently informed about the benefits of the product. characteristics.

While structured bonds carry a high risk of loss of principal due to their high-yield nature, regional banks across the country have ramped up sales of such products in recent years due to their attractive kickbacks.

So there have been cases where inexperienced investors have suffered losses on structured bonds they have purchased without having received sufficient explanation from financial institutions.

The Financial Services Agency presented a plan at the end of August to assess whether financial institutions give enough information when selling structured bonds to retail customers.

In August, Chiba Bank halted structured bond sales through its subsidiary, Chibagin Securities Co. Bank of Yokohama and Hiroshima Bank plan to partially halt structured bond sales, and other regional banks may follow suit. not.

[Copyright The Jiji Press, Ltd.]