Additional Tier 1: Difference between revisions
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imported>Doug Williamson (Expand. Source: Bank of England http://www.bankofengland.co.uk/publications/Documents/fsr/fsrboxes/1406box3.pdf) |
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Revision as of 13:29, 10 November 2016
Banking.
(AT1).
Additional Tier 1 capital.
AT1 is the second highest quality form of regulatory capital under Basel III and CRD IV.
It is intermediate in quality between Core Equity Tier 1 (CET1, the highest quality) and Tier 2 (T2, the lowest quality).
The required features for AT1 are designed to ensure that AT1 instruments are loss-absorbing on a going-concern basis.
- AT1 issuers have full discretion to cancel coupon payments at all times.
- AT1 instruments may be written down or converted into CET1 instruments at a pre-agreed conversion rate.
- Write-down or conversion happens automatically when a pre-specified CET1 capital ratio is reached.
- Write-down may be permanent or temporary, in full or partial.
- Conversion may also be full or partial.
