Basel Committee will consider a potential for CoCo bonds

03/1/2011 | Bloomberg

The Basel Committee on Banking Supervision is scheduled to discuss whether contingent-convertible bonds should count toward major banks' extra capital requirements. Additional capital "has to be available to absorb losses before the bank fails, and obviously common equity meets fully that standard," said Stefan Walter, secretary general of the Basel Committee. "We're now also assessing CoCos and the possibility of this type of instrument fulfilling part of the loss-absorbency requirement."

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