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MNI BRIEF: BOE Joins ECB In Reassuring AT1 Holders

(MNI) London

Common equity instruments will be the first to absorb losses in bank failures in the UK, the Bank of England said on Monday, after Credit Suisse AT1 bond holders were wiped out in the deal to sell it to UBS. The BOE's comments echoed those of European banking regulators earlier in the day.

"AT1 instruments rank ahead of CET1 and behind T2 in the hierarchy. Holders of such instruments should expect to be exposed to losses in resolution or insolvency in the order of their positions in this hierarchy," the Bank said in the statement released on Monday.

According to the BOE, the UK’s bank resolution framework has a clear statutory order, which was underlined only last week with the sale of SVB UK to HSBC for a nominal one pound, the Bank said..

MNI London Bureau | +44 203-865-3812 |
MNI London Bureau | +44 203-865-3812 |

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