Regulators want to fix AT1s. Investors want restraint
Tweaking the instrument that regulators love to hate may be the only way to prevent its abolition
In July, analysts at BNP Paribas published a note on bank hybrid capital that referenced an old UK television show in which contestants rate each other for attractiveness.
The show is called “Snog, Marry, Avoid?”. The note’s thread was that market participants – investors, banks, regulators – could similarly rate Additional Tier 1 bonds, dividing themselves into fans of AT1s in their current form (snoggers), even bigger fans who think AT1s can be made better (marriers), and those who think the
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