The Reserve Bank of New Zealand (RBNZ) is considering the possibility of dropping contingent debt instruments from its capital regime, citing concerns over recent European experience.
In a document published today (July 14), the central bank says it has concerns over the complexity and side-effects of the instruments, which are sold as debt but contain “triggers” that cause them to convert to equity when a bank gets into trouble.
The RBNZ says it sees “little regulatory value” in “going concer
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