The wisdom of Oz? Why Australia is phasing out AT1s
Analysts think Australian banks will transition smoothly, but other countries unlikely to follow
The March 2023 bail-in of additional tier 1 (AT1) bonds issued by Credit Suisse sparked a lively debate. Some suggested the bonds had acted as intended, allowing a relatively smooth rescue operation by UBS. Others suggested the market reaction showed a wide gap between the regulatory expectation that AT1s can be used as loss-absorbers in a going-concern scenario, and the investor expectation that they will only be bailed in during a resolution process.
Despite all the discussion, no regulator had
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