medium · FRM Part 2 Current Issues
In the context of the 2023 Swiss bank resolution, what does the term 'viability event' specifically refer to as a trigger for AT1 instruments?
- A credit rating downgrade of the reference entity to 'D' (Default) status by at least two separate, independent major credit agencies.
- The point at which the bank's net interest income (NII) turns negative for two full consecutive fiscal quarters in a row.
- A drop in the Common Equity Tier 1 (CET1) capital ratio below the 7.0% regulatory minimum set by the Basel III capital conservation buffer rule.
- A discretionary determination by the regulator that the bank would become non-viable, or the receipt of extraordinary public support.
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