MNI BRIEF: AT1 Retains Priority Over Equity In Eurozone- ECB

Common equity instruments will remain the first to absorb losses in bank failures, eurozone banking authorities said on Monday, after Credit Suisse AT1 bond holders were wiped out in the deal to sell it to UBS.

"Common equity instruments are the first ones to absorb losses, and only after their full use would Additional Tier 1 be required to be written down. This approach has been consistently applied in past cases and will continue to guide the actions of the SRB and ECB banking supervision in crisis interventions," European Central Bank Banking Supervision, the Single Resolution Board and the European Banking Authority said in a joint statement.

"Additional Tier 1 is and will remain an important component of the capital structure of European banks," they said, adding that the European banking sector is resilient, with robust levels of capital and liquidity.