BoE Capital Adviser Warns: AT1 Bonds May Face an Uncertain Future Amid Potential Rule Changes

In a recent discussion that has drawn attention from investors and financial analysts alike, a capital adviser at the Bank of England has recommended that investors consider abandoning Additional Tier 1 (AT1) bonds if forthcoming regulatory changes come into effect. This statement underscores the contentious nature of AT1 bonds, which play a crucial role in bank capital structures but could face new challenges if regulatory conditions shift.

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Europe's Lenders Surge Ahead with AT1 Bond Issuance Despite Regulatory Concerns

Additional Tier 1 bond supply appears to have kicked into overdrive as Europe's lenders, in a remarkably bold display of confidence, seem to be dismissing recent regulatory jitters. Over the past few months, banks all over the continent have tapped this type of debt-which is supposed to absorb losses during times of stress-to beef up capital buffers and to raise cash in ways that are new and innovative.

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