Lately, investing in banks has become as chancy as having a flutter on the Grand National horserace - hard to resist but a bit of a mug's game. False starts, steward inquiries and the financial district-equivalent of leaping 30 fences - all enlivened by thundering competition. And, if that's not heart-stopping enough, there's always the risk of becoming a casualty along the way.
But investors, like punters, still harbor the hope of backing an unlikely winner. The trade in contingent convertible bonds or "CoCos" -- a hybrid of debt and equity -- has become one of the more fashionable bits of riding gear in the City, as traders, hedge funds and banks all try to pull off a risky bet. But, while the returns can be high, so too can the carnage that CoCos cause.
KPMG's latest assessment of the British banking industry highlights the increasing difficulty of juggling regulators, government and investors while 80 percent of profits still going towards remediation costs.
The CoCo market has doubled in size this year already, with some commentators expecting it to balloon to more than £200 billion ($332 billion) within 5 years. At this pace of growth, this particular financial innovation could become a problem for the industry, creating systemic risk and panic if they ever get called.
CoCos are sold as bonds that pay very lucrative interest rates. What makes them different to conventional debt is that if an issuer, such as a bank, has a shortage of capital, then CoCos transform into equity. Theoretically, this means that the bank has an emergency capital buffer that deflects problems.