There is a risk that retail investors in particular, mesmerised by the relatively high returns on coco bonds, could lose sight of the risks involved. Banks are aware of the danger: Deutsche Bank, for instance, issued its coco bonds in denominations of € in order to restrict entry into coco bond business to institutional and professional investors.
In the United Kingdom, the sale and distribution of coco bonds to retail investors is even prohibited by law. BIS central bankers’ speeches  1  Now is the time for supervisors to develop a code of best practices for issuing coco bonds.