Contingent convertible capital: Difference between revisions

From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson
(Expand. Sources: linked pages.)
imported>Doug Williamson
(Update.)
Line 2: Line 2:




Depending on their terms, contingent convertible capital may be treated by regulators either as Additional Tier 1 (AT1) capital, or as Tier 2 (T2) capital.
Depending on its terms, contingent convertible capital may be treated by regulators either as Additional Tier 1 (AT1) capital, or as Tier 2 (T2) capital.





Revision as of 15:08, 11 November 2016

Contingent convertible capital is made up of hybrid capital securities that, through a conversion mechanism, provide additional capital available to absorb losses when the capital of the issuing institution falls below a certain level. They are generally used by banks in meeting regulatory capital requirements.


Depending on its terms, contingent convertible capital may be treated by regulators either as Additional Tier 1 (AT1) capital, or as Tier 2 (T2) capital.


"Contingent convertible capital securities" is frequently and conveniently abbreviated to "CoCos".

The BIS's quarterly report of September 2013 has a useful primer on CoCos.


See also