hard · Debt Capital Markets
In the resolution of a globally systemic bank, which of the following best describes the risk demonstrated by the 2023 write-down of Additional Tier 1 (AT1) instruments while equity holders retained some value?
- The write-down was caused by a breach of the 5.125% CET1 trigger.
- Equity credit for hybrids is only granted if they are perpetual without calls.
- The contractual loss-absorption hierarchy can be overridden by statutory resolution regimes.
- AT1 instruments are senior to common equity in all bankruptcy and resolution scenarios.
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