Tier 1 capital: Difference between revisions

{{aai|crr|}}Of a regulated financial institution, the capital level below everything else than gives comfort to the creditors — in particular, its [[depositor]]s — that those debts will be met. The most obvious type of tier one capital is the institution’s share capital — “[[tier 1 common equity]]”. But also is [[alternative tier 1 capital]], also known as [[AT1]], [[eighty-one]], which takes the form of [[contingent convertible securities]] (“co-cos”). It became clear in March 2023 when [[Credit Suisse]] finally gave up the ghost, that many in the market, including its AT1 investors, didn’t fabulously understand how it worked. (In fairness to them, it wasn’t obvious, even though it was written into the terms and even the title of the [[AT1]] Notes).

===[[Debit Suisse]] and the irate bondholders===

Famously, in that panicked Spring weekend in 2023 when it slipped into history<ref>We have a sense [[Credit Suisse]]’s history is not done just yet but that, like Disaster Area frontman Hotblack Desiato, it is merely spending a year dead for tax (and, er regulatory capital) purposes. It may well be back, at least as a high-street banking brand in Switzerland.</ref> the “trinity” of Swiss regulators put a gun to UBS’s head, forced it to make an honest bank of [[Credit Suisse]] in a process in which it absorbed [[Lucky]]’s equity, and the jewels and hellish instruments of madness and torture secreted around its balance sheet — ''other'' than its AT1s. The regulators instead, by ordinance, directed [[Credit Suisse|Lucky]] to write down its Perpetual Tier 1 Contingent Write-Down Capital Notes to zero.