Hybrids, take two: Lloyds in contingent capital frame

22 Oct 2009

Bondholders voiced reservations and Mervyn King, governor of the Bank of England, laid out some of the drawbacks, but the momentum behind banks’ plans to issue some form of contingent capital increased again this week.

King, in a speech calling for financial institutions to be broken up into low-risk utilities and high-risk trading businesses, said that contingent capital would not stop bank failures (see separate story, page xx).

But even so, there is a growing sense that the first issue of the product — ...

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