Post by Bank for International Settlements – BIS

Can Additional Tier 1 (AT1) capital instruments be fixed? In a new FSI Brief, Rodrigo Coelho, Yvan Lengwiler, Kumar Rishabh and Rastko Vrbaski examine why AT1 instruments often absorb losses only at or near failure, rather than earlier, while banks are still viable. The authors then discuss options to enhance the effectiveness of AT1 instruments as going-concern capital, while acknowledging the trade-offs associated with different design choices. https://bit.ly/4ooG6P4 #FinancialStabilityInstitute