Toxicity in finance

Abstract

This paper analyses from a critical perspective the irregularities committed by financial institutions in the use of complex techniques to increase liquidity, the commercialization of toxic financial products, such as preferred participations or multi-currency mortgages, and the bad faith in the commercialization of loans. Firstly we will define what we consider as a toxic financial product or toxic behaviour, together with the definition of each instrument; followed by the commercialization and the consequences on the surroundings; finally, we focus on preventive measures from the institutional bodies that are regulating the situation. This leads to conclusions that help us to understand the wave of lawsuits filed by retail clients requesting the nullity due to a lack of consent in these contracts, based on the lack of information to the customer and the repeated failure to comply with MIFID regulations of financial institutions.