Attractive as these instruments may be to banks and investors, we must remember that these are very complex capital instruments, especially since they are governed by such disparate areas of the law as companies law, debt law, tax law and supervisory law.
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.