Complex instruments pose low risk to Italy's stability
Banca d'Italia's latest assessment finds that complex financial instruments circulating in Italy pose low risks to financial stability. This holds despite an increase in their volume in 2025.
Complex instruments volumes rise
Banca d'Italia's latest analysis, referencing data as of December 31, 2025, reveals an increase in the volume of complex securities and derivatives outstanding in Italy, yet risks to financial stability remain low.
Total debt securities amounted to €3,189 billion, with 15 percent (€480 billion) classified as complex.
Securitizations (46 percent), certificates (19 percent), and various subordinated bonds were the most significant types.
Italian households held €78 billion in complex debt securities, an increase of €3.6 billion from the previous year, primarily in certificates, many with capital protection.
The notional value of complex derivatives surged by 28 percent to €880 billion, driven mainly by credit default swaps (+42% to €517 billion) and swaptions (+14% to €243 billion).
Italian banks and major international dealers are the main counterparties, with balanced exposures, and these instruments are not present in household portfolios.
Assessing risks with detailed data
Banca d'Italia's assessment relies on a rigorous analytical and methodological framework, periodically updated to identify and assess risk areas from financial instruments in Italy.
This framework enables the Bank to exercise its intervention power, derived from MiFIR and the Italian Consolidated Law on Finance (TUF), allowing it to limit the marketing, distribution, or sale of financial instruments to preserve national financial stability.
Data from statistical and supervisory reporting, the securities register, and the EMIR database inform this two-stage risk analysis.
For historical context, complex debt securities in circulation amounted to €440 billion at the end of 2024, with Italian households holding €75 billion.
Complex derivatives had a notional value of €684 billion, up from €550 billion in 2023.
Vigilance remains key
While the report paints a reassuring picture of low risks, the increasing volume of complex instruments warrants continuous vigilance.
The reliance on capital protection for household certificates, while positive, does not negate the inherent complexity for retail investors.
Banca d'Italia's robust intervention power is crucial, but its effectiveness depends on proactive identification of emerging vulnerabilities.