Contingent convertible capital: Difference between revisions
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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. | 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. | ||
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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. | 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. | ||
The [[BIS]]'s quarterly report of September 2013 has a useful [http://www.bis.org/publ/qtrpdf/r_qt1309f.pdf primer] on CoCos. | The [[BIS]]'s quarterly report of September 2013 has a useful [http://www.bis.org/publ/qtrpdf/r_qt1309f.pdf primer] on CoCos. | ||
Revision as of 10:38, 27 February 2020
(CoCos.)
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.
The BIS's quarterly report of September 2013 has a useful primer on CoCos.
