EBA banishes equity subordination fears with technical standards for AT1
The European Banking Authority has released a near-final draft of its regulatory technical standards for own funds, cheering potential investors in additional tier one capital by dropping a proposal to stop banks from paying coupons when hybrid capital instruments are temporarily written down.
However, there was concern that the EBA had apparently bowed to intense lobbying pressure from investment banks by releasing the document early.
The decision to make write-up and coupon payments discretionary is a boon to investors who have been concerned that new generation capital instruments could leave them
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