In the latest post on the Suara SEACEN blog, Amarendra Mohan writes on the Loss Absorbency of Additional Tier 1 Capital Instruments under Basel III: The Credit Suisse Case: The sophisticated investors in Credit Suisse AT1 bonds were surprised that the Additional Tier1 (AT1) bonds absorbed losses before equity shares. But this is precisely what is envisaged under Basel III to restore a bank to viability in a “going concern” context, and the terms of issuance of Credit Suisse AT1 bonds mentioned that this is possible in the case of a “viability event”. Read more at https://lnkd.in/gyx7knEH
Rogelio Mercado
11mo
Nice read!
Central Banker || Regulation and Supervision || IMF || RBI || ECB || FRM || PhD
11moVery nicely put !! Step by step elucidation, clearly differentiating between supervisory action and the resolution action, and covering concisely the whole issue with anecdotal regulations and facts !! Kudos to the author!