This section consolidates ICMA responses to consultations concerning various forms of bank capital, including the characteristics of additional tier 1 capital, buffer contingent capital securities and bail-in.
02 May 2017
Bringing together various members of the Bail-In Working Group, regulators, issuers and other market participants, the ICMA Bail-in Working Group held a seminar on 7 April 2017 to examine several aspects of the key area of banking regulatory reform - the bail-in regime and capital requirements for banks. Convened under Chatham House rules, the seminar discussed three broad topics: an examination of pricing of bank debt in the current environment; a look at disclosure and credit evaluation of banks; and a debate on corporate governance for banks with a specific look at whether fixed income investors are getting a fair deal.
A summary of the seminar is available to view here.
20 December 2016
Click here to see the ICMA Bail-in Working Group’s latest discussion letter to the ECB. The letter sets out thoughts on two issues: (1) assessing and pricing bank credit risk and (2) governance and the rights of noteholders, in each case from the buy-side point of view, and which will be explored further in 2017.
7 September 2016
Click here to see the ICMA Bail-in Working Group’s discussion letter to the ECB. The letter highlights observations on the operation of the bail-in regime, from the buy-side point of view, and builds upon, and reflects evolutions in thinking since, a letter sent to the ECB on 31 July 2015, also on the bail-in mechanism.
30 August 2016
Click here to see the ICMA response to the EBA Interim Report on MREL.
16 May 2016
Click here to see the Joint BBA/ICMA response to the UK PRA’s consultation on the contractual recognition of bail-in.
Click here to see the ICMA Bail-In Working Group's discussion letter to the ECB, the purpose of which is to set out views on the operation of the bail-in mechanism.
27 January 2015
Click here to see the ICMA response to the UK FCA’s consultation on restrictions on the retail distribution of regulatory capital instruments.
12 September 2014
Click here to see the ICMA Bail-in Working Group’s response to the questions enumerated in the Financial Policy Committee’s Review of the Leverage Ratio.
3 July 2012
Click here to see ICMA's response to the questions enumerated in the European Banking Authority (EBA) Consultation Paper on Draft Regulatory Technical Standards on Own Funds.
20 April 2012
Click here to see ICMA's letter in response to the questions in the European Commission’s "Discussion paper on the debt write-down tool – bail-in"
31 January 2012
Click here to see the response from the European Banking Authority (EBA) to the ICMA letter and survey on EBA's term sheet for Buffer Convertible Capital Securities (BCCS).
17 January 2012
On 8 December 2011, the European Banking Authority (EBA) published a formal recommendation on the creation of temporary capital buffers, the objective of which is to create an exceptional and temporary capital buffer to address current market concerns over sovereign risk (the “Stress Capital Requirement”), and which may include very strong newly issued buffer convertible capital securities (“BCCS”) if consistent with the EBA “Buffer Convertible Capital Securities Common Term Sheet”.
One of the key advantages of issuing BCCS to meet the temporary Stress Capital Requirement is that it gives issuers access to the fixed income investor base to raise EBA Core Tier 1 eligible capital, and therefore the possibility of using BCCS to tap supplementary investor sources for Core Tier 1 capital is welcomed.
However, in order for the BCCS to be fit for purpose, as well as achieving the regulatory objectives, the host instrument needs to be sufficiently attractive and marketable.
With marketability being the main influential factor, we conducted a survey on the matter among major market participants. More precisely, we asked a series of questions comparing the market impact of BCCS with a Tier 2 host with otherwise identical BCCS with an Additional Tier 1-style host.
Click the links below to see:
- ICMA's letter to the EBA: Proposals relating to the EBA Termsheet for Buffer Convertible Capital Securities
- the results of ICMA's survey on “Buffer Contingent Capital Securities”