No. 359 - Bank bonds in Italian households' portfolios

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by Massimo Coletta and Raffaele SantioniOctober 2016

The paper analyses the dynamics and main features of bank bonds held by Italian households and presents an estimate of the gross yield to maturity of the bonds purchased at issue. Since 1950 the share of these assets in households' portfolios has shown wide fluctuations, primarily reflecting the issuance policies of banks and changes in the tax treatment of securities, as well as changes in preferences. The share of bonds in the financial wealth of households reached a peak of 11 percent in 1973 and 2011.

Since 2012 investment in bonds has started to decrease: by March 2016 the share of bank bonds in the financial wealth of households had returned to below 5 percent. The gross yield at issue of bank bonds placed with Italian households increased during the sovereign debt crisis but has now fallen back to the levels reached in the years preceding 2011. The yield spread with respect to five-year BTPs, which was mostly negative between 2009 and 2012, has been positive since the end of 2013.

Published in 2018 in: Bancaria, 3-2018, pp. 52-61

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