Tier 2 capital
ECB bank supervisors want top-down stress test that bites
Proposal would simplify capital structure with something similar to US stress capital buffer
Chinese G-Sibs load up on non-core capital ahead of TLAC introduction
Agricultural Bank of China boosts AT1 capital, while Bank of China drives Tier 2 growth
Investors choose safer bank bonds as AT1 opportunity wanes
Technical factors mean senior bank bonds now offer relative value
Metro Bank bets the house on lending pivot
New portfolio will need to grow quickly to avoid squeezing net interest margins, say experts
Chinese banks expected to launch TLAC market onshore
Estimated issuance needs of $510 billion are heavy, but thought to be manageable
Cost of bank bail-in rules lower than expected – EBA
MREL pricing manageable for most banks, though troubled firms may struggle to meet targets
Basel III capital shortfall shrinks to €8bn
G-Sibs responsible for 77% of the aggregate deficit
Green bonds risk failing TLAC test
Europe’s banks – in their scramble to issue ethical debt – butt up against tough rules on loss-absorbing capital
EU bail-in debt sales plummeted 47% in H2 2020
Effects of pandemic continue as MREL-compliant liabilities drop, SRB figures show
EU banks short €178bn of MREL requirements
117 resolution entities report bail-in bond and capital shortfalls
UniCredit to liberate capital on Pillar 2 change
Bank targets 50% payout ratio
MREL target drifts further out of Rabobank’s reach
Dutch bank has current MREL ratio of 27.8%, compared with target of 28.58%
Capital issue boosts BofA’s AT1 capital by 11%
The bank issued two slugs of perpetual preferred stocks in Q2 2019
Fewer banks to sell MREL debt – EBA
Lenders plan to attain more retail deposits and Tier 2 and AT1 instruments instead
European banks adjust capital mix
Additional Tier 1 totals climb, CET1 and Tier 2 dips
UK banks triple AT1 capital in four years
Total outstanding amounts of AT1 stood at £42 billion at end-2018
Capital build at European banks at odds with profitability
European firms account for 47% of large banks' capital raises, but just 22% of profits
Over four years, US G-Sib AT1 capital soars
AT1 capital has increased 57% since 2014, CET1 capital up 2%, Tier 2 capital –16%
Capital structures vary across EU banks
Median lender's capital stack is 75% CET1, 10% AT1, and 15% Tier 2
HSBC reclassifies debt to bolster Tier 2 capital
Review of securities to add 40bp to bank's total capital ratio
Going local: Brexit prompts rethink on MREL governing law
One EU regulator has already asked banks to avoid reliance on English law for bail-in