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 tax advantage for the issuer. And when the issuer’s viability starts deteriorating, cocos may help lower the probability of default.… Read More Convertible Capital Hurdles
This is complicated material. But … looking at Article 9 of this standard, the bar for recognition of supplementary capital looks high. Even though it applies after the entry into force of Regulation (EU) No 575/2013 (CRR) and only when both CRR and Solvency (2009/138/EC) apply. The requirements are stacked up high! Article 9 says basically this: a solvency… Read More ESA’s tough final Regulatory Standards on conglomerate capital are out.