Market for CoCos could take years to develop, say Credit Institute panellists
Regulators may be sold on the idea of banks issuing loss-absorbing contingent convertible securities, but panellists at the latest Credit Institute event questioned whether there is a natural investor base for these instruments.
Investors remain unconvinced by the appeal of contingent convertible instruments, despite the recent push by regulatory bodies such as the Basel Committee on Banking Supervision for banks to issue them to meet more stringent capital requirements. That, at least, was the view of investor participants at the latest Credit Institute event, The Future for Banks After ‘Too Big to Fail’, held in London on December 2.
According to estimates, banks will need to boost capital by anywhere between $400
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