Credit Suisse’s AT1 loss hurt regulatory credibility – paper
Declining bail-in spreads show markets doubt regulators will enforce resolution, BIS study argues
The Swiss regulator’s decision not to trigger a bail-in mechanism during Credit Suisse’s collapse in 2023 has damaged the credibility of regulators more broadly and reduced market discipline on weak banks, a new study from the Bank for International Settlements argues.
As Credit Suisse was failing in 2023, the Swiss Financial Market Supervisory Authority (Finma), prepared a resolution plan that would have written down the bank’s equity and Additional Tier 1 (AT1) instruments while converting the
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