Are deductions from bank capital always deductions?

This week Bloomberg’s Charles Penty and Angeline Benoit reported on Banco de España’s efforts to apply a waiver for capital deductions originating from Deferred Tax assets. Now, discussions on deductions from regulatory capital are often…

Update on Deutsche

Shortly after my posting, Deutsche announced it would not call its perpetual bond, reports Reuters. One rationale for not calling could be that the bond would still be useful as bailinable debt. An interesting trade-off…

Deutsche’s phase-out of old-style capital securities and the meaning of perpetual debt

On July 17, I posted on this blog about the difficulties that EU banks face when replacing pre-crises capital securities with Basel III compliant securities. Today the WSJ illustrates these difficulties for Deutsche Bank. This…

Convertible Capital Hurdles

There is a vibrant debate going on regarding convertible capital or coco’s, see for example this recent paper from the U.S. treasury. On first sight a coco looks great.  In going concern there is a…

Europe’s painful phase-out of old-style capital instruments

Matthew Attwood in Financial News reports on the difficulties that European banks face when replacing pre-crises capital instruments by Basel III compliant instruments. This was a small disaster waiting to happen, as Bazel III rules made…