Canada moving ahead on bank contingent capital plan
Fitch: Canada Moving Ahead on Bank Contingent Capital Plan (http://www.heraldonline.com/2013/05/17/4871535/fitch-canada-moving-ahead-on-bank.html)
www.heraldonline.com | May 17, 2013
Canadian bank regulators have moved ahead of their global counterparts in specifying the terms under which certain types of contingent capital could be converted to common equity in a bank stress scenario. New forms of nonviable contingent capital (NVCC) instruments will be issued by Canadian banks …
… These new instruments will include NVCC triggers that make clear the conditions under which “bail-in” debt and preferred stock will be converted when Canadian banks require more capital and regulators deem them “nonviable.” …
The amount of outstanding capital that is not NVCC-compliant will be reduced over the next few years as Canada moves toward full implementation of Basel III capital standards. …