Putting aside your principal
Loss absorbency is a buzzword among bank regulators, so it’s understandable that lenders in several jurisdictions are eyeing up the nascent contingent capital market. Barclays and Royal Bank of Scotland are considering deals, while Danish and Swedish regulators have made noises about allowing their banks to raise Pillar II capital in Coco form.
Swiss banks are also required to issue Cocos. But not so Swiss insurers. That made the motives for Swiss Res $750m permanent write-down trade, which was priced on Monday, hard for some to fathom.
What was immediately apparent, though, was that the market is split into two camps: Coco
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