What to expect from Asian CoCos

Author: | Published: 11 Oct 2011

Bankers in Asia expect contingent convertible bonds’ (CoCos) structures to develop idiosyncratically across the region.The Bank of China recently submitted recommendations to the Basel Committee on Banking Supervision that the scope of application of CoCos be expanded on the basis of existing regulations to meet additional capital requirement for G-Sibs [global systemically important banks].
The statement, a response to the Committee’s proposal that the bulk of additional loss absorbency for G-Sibs be met with Common Equity Tier 1 (CET1), said the Basel III had significantly increased bank’s capital requirements and strengthened the leading position of common equity in tier-1 capital.
"Another increase of additional capital requirement met...