The Hong Kong Monetary Authority HKMA and Monetary Authority of Singapore MAS followed the example of regulators in Europe last week, by issuing statements in response to the $17 billion wipe-out of additional tier 1 AT1 bonds that followed Credit Suisse’s takeover by UBS on March 19.
Both central banks sought to assure AT1 bondholders that their traditional place above shareholders in the loss-absorbing hierarchy would be maintained, in the case of further bank collapses in either location.
“MAS said today that in exercising its powers to resolve a financial institution FI, it intends to abide by the hierarchy of claims in liquidation. This...
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