This post was originally published on this site
https://i-invdn-com.investing.com/news/LYNXNPEBAG0BO_M.jpg
“Our banks are unquestionably strong, very different legal framework. We don’t need to go into the ‘what if’ rabbit hole. It’s an entirely different set of circumstances here in Australia,” Assistant Treasurer Stephen Jones told the Australian Financial Review Banking Summit in Sydney.
“We are in a very different world to what’s occurred out there.”
Swiss regulators wrote down 16 billion Swiss francs ($17.5 billion) of Credit Suisse bonds, known as Additional Tier 1 or AT1 debt, to zero as part of a forced rescue merger with UBS.
Under the deal, holders of Credit Suisse AT1 bonds received nothing, while shareholders, who usually rank below bondholders in terms of who gets paid when a bank or company collapses, will receive $3.23 billion.
AT1 bonds – a $275 billion sector also known as “contingent convertibles” or “CoCo” bonds – act as shock absorbers if a bank’s capital levels fall below a certain threshold. They can be converted into equity or written off.
