FTSE 100 rises and European banking shares are up after early jitters over what UBS takeover deal means for bondholders
What are AT1 bank bonds – and why are Credit Suisse’s wiped out?First Republic’s shares drop after downgraded credit ratingNils Pratley: Swiss solve one problem at Credit Suisse, but create another for bondholdersComment: Bonds were seen as a safe haven – but they are central to this bank crisis
Stocks climbed on Monday in London and New York after central bankers and politicians sought to soothe jitters triggered by the emergency rescue of Credit Suisse during the weekend.
Central banks in the UK and eurozone issued statements aimed at reassuring investors that – unlike the controversial approach taken by the Swiss authorities in the Credit Suisse deal – their jurisdictions would follow a hierarchy in which equity holders would lose out before bond holders.
“The UK’s bank resolution framework has a clear statutory order in which shareholders and creditors would bear losses in a resolution or insolvency scenario,” the Bank of England said. The prime minister’s official spokesperson also sought to offer reassurance, telling reporters the British banking system “remains safe and well capitalised”.
Continue reading…FTSE 100 rises and European banking shares are up after early jitters over what UBS takeover deal means for bondholdersWhat are AT1 bank bonds – and why are Credit Suisse’s wiped out?First Republic’s shares drop after downgraded credit ratingNils Pratley: Swiss solve one problem at Credit Suisse, but create another for bondholdersComment: Bonds were seen as a safe haven – but they are central to this bank crisisStocks climbed on Monday in London and New York after central bankers and politicians sought to soothe jitters triggered by the emergency rescue of Credit Suisse during the weekend.Central banks in the UK and eurozone issued statements aimed at reassuring investors that – unlike the controversial approach taken by the Swiss authorities in the Credit Suisse deal – their jurisdictions would follow a hierarchy in which equity holders would lose out before bond holders.“The UK’s bank resolution framework has a clear statutory order in which shareholders and creditors would bear losses in a resolution or insolvency scenario,” the Bank of England said. The prime minister’s official spokesperson also sought to offer reassurance, telling reporters the British banking system “remains safe and well capitalised”. Continue reading…