Basel hints at CoCo acceptance

18 Oct 2010

The Basel Committee on Banking Supervision is reviewing the ability of contingent capital to provide going concern loss absorbency for systemically important banks, it confirmed in its report on financial reform to the G20, published on Tuesday.

The BCBS’s consultation in August, which recommended that all capital instruments be subject to regulatory conversion/writedown, suggested that it viewed contingent capital primarily as a gone concern instrument, in contrast to the instruments issued so far or those proposed by the Swiss government’s expert commission. Given uncertain investor ...

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