Europe's new 'senior' asset class

摘要

The European Commission last week proposed a new form of loss-absorbing debt for the region's banks, providing a much-needed solution to the growing fragmentation in national regulations. The EC thinks that so-called "unpreferred" senior unsecured debt, which would sit beneath existing senior debt, is the most cost-effective way for banks to comply with the subordination requirement of the total loss-absorbing capacity standard for global systemically important institutions. The EC said harmonising rules on the treatment of bank creditors in resolution would also limit the risk of competition being distorted in the internal market.