CS Takes the Sub Way

This is a link to an FT article explaining the changes currently being implemented by Credit Suisse to its legal structure in response to the resolution planning requirements of its main regulator. Continue reading

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I Liikanen that!! UBS Pays Bonuses in Bail-In Bonds

The FT reports that UBS is to pay the bonuses of 6,500 of its highest earners using bail-in bonds.  This initiative is consistent with one of the central recommendations of the Liikanen Report (see our blogpost “Tough Times For UK Banks: The Liikanen Group Publishes its Final Report“) which said that bail-in debt should be used in the remuneration schemes of a bank’s top management.

According to the report, the bonds in question will pay a market-based rate of interest but would be written down to zero in the event that the bank’s regulatory capital fell below 7%.  The bonds will fully vest after 5 years.  In the currently regulatory environment, and with UBS shares having fallen off their recent peak, this may well be an offer many within UBS are happy to accept.