Be Aware Of Real Risk Of Precipice Bonds

12.00.00am GMT Wed 26th Mar 2003

Liberal Democrat Shadow Treasury Minister, Norman Lamb MP, has raised concerns about the high risk of investing in so-called 'precipice bonds'. This follows a Financial Services Authority warning issued without consultation, "because we believe action is needed immediately to protect consumers."

Commenting, Norman Lamb said:

"Clearly, there are always risks associated with investing in high-income products, and firms offering them should always be careful to make consumers fully aware of what these risks are. However, this is not happening with precipice bonds."

"I have asked the FSA to further clarify the extent of their concern over precipice bonds, and whether there are particular bonds which they consider to present a specific risk to consumers' investments. The fact that precipice bonds are especially popular with older people makes the need for transparency even more important."