BoE may limit AT1 in leverage ratio as concerns grow on triggers…

By Graham Bippart
16 Jul 2014

The Bank of England’s Financial Policy Committee said additional tier one (AT1) debt may be an "inappropriate" means of meeting leverage ratio requirements, in a paper published last Friday. The FPC said it might also consider completely barring banks from using AT1 in the leverage ratio calculation.

The paper comes after the Bank of England had already raised concerns about AT1 instruments in its June Financial Stability Report and may illustrate an increasing preference by European authorities for triggers of 7% and higher as they re-evaluate the quality of AT1 as regulatory capital.  

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