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In a world where every basis point matters, saving 75% on the cost of a bond issue is a compelling proposition — especially when the deal in question opens up an entirely new investor base. ING achieved exactly this with two visits to Tokyo’s Pro-bond market.

Tetsuya Kubo, President & CEO, SMBC Nikko Securities Inc, believes that Abenomics will create a wealth of new opportunities for Japan’s economy, as well as for its capital market and banking industry. In this interview, which took place in Tokyo in the last week of April, he shared his views on these new opportunities with EuroWeek.

Abenomics has caught the imagination of the Japanese population, as well as the international markets. However, economists argue that the stimulus measures of Japan’s unprecedentedly popular prime minister Shinzo Abe will “succeed brilliantly or flame out”. For now, most are giving Abenomics the benefit of the doubt.

An increasingly diverse and liquid asset class in instruments across the capital structure is taking shape. But there are plenty of unresolved questions facing investors in instruments such as Cocos and additional tier 1 (AT1). To discuss how they are meeting these challenges, a number of investors and several issuers gathered to compare notes at the Morgan Stanley Bank Capital Investor Roundtable in late May.

A year ago, to call the investor base for new-style bank capital instruments truly global would have been pushing it. Nowadays, the boast is not such a stretch, with Europe finally beginning to take a bigger role, most evident in the recent BBVA AT1 trade, US retail firmly behind the product, the US institutional bid gaining strength and Asian private banks as hungry as ever. Philip Moore reports.

Regulatory harmonisation is on its way. Thanks to CRD IV and CRR, for the first time in the history of the European bank capital space, there will soon be regulation that applies in the same way in each EU state. However, as Philip Moore reports, investors will still need to make a judgement on the likely response of national regulators to banks judged to be failing or likely to fail.

Unless you’ve been living under a rock for the past five years, you will be painfully aware that banks need more capital. But how much of that desperately needed resource is going to come from the new instruments the market has waited so long for? Will Caiger-Smith examines the outlook for the bank capital market.

Bank capital gets its name from a simple principle — it is designed to form a solid foundation upon which a bank can operate, a buffer against which it can lend. Funding instruments like senior unsecured, meanwhile, are not there to absorb losses. Or are they? Will Caiger-Smith reports.

The financial crisis exposed significant flaws in banks’ capital structures, not least the fact that many supposedly loss-absorbing instruments proved surprisingly unfit for purpose. But over the past few years, bank capital has been transformed. Will Caiger-Smith reports on a market reborn.

The deluge may be yet to come, but some banks have already bitten the bullet. Banks have already printed Cocos, additional tier one and tier two capital that they expect to comply with the final CRD and EBA guidelines. But it hasn’t always been an easy ride. Will Caiger-Smith reports.

Andrea Enria, chairman of the European Banking Authority, made the following speech at the European Commission’s public hearing on EU financial supervision in Brussels on May 24 this year.

Over the past two years, banks have focused on building up their core capital ratios, through a combination of equity issuance, asset disposals, RWA reduction, and liability management.