Additional Tier 1 (AT1) bonds issued by Malaysian banks are ranked higher than equity holdings in the case of resolution, said Bank Negara Malaysia governor Tan Sri Nor Shamsiah Mohd Yunus.
“It is [more] senior [than equities]. Our banks do not rely on AT1 for capital, so if you look at the components of the capital, more than 80% of them are equities and retained earnings,” she told a press briefing after releasing the central bank’s Annual Report 2022.
The world's attention has been drawn to the pecking order in the resolution process of banks, as some quarters view that the Swiss banking authorities have changed the pecking order by relegating AT1, or additional Tier 1, bondholders to behind ordinary shareholders of Credit Suisse Group AG.
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