SYDNEY, Dec. 4 -- Australian Prudential Regulation Authority issued the following media release:
The Australian Prudential Regulation Authority (APRA) has finalised consequential amendments to its bank prudential framework to phase out Additional Tier 1 (AT1) capital instruments - also known as hybrid bonds - as eligible regulatory capital.
APRA confirmed in December last year its decision to phase out AT1, enabling the benefits of:
* improved stabilisation in a crisis and reduced contagion risk. International experience has shown that AT1 capital does not fulfil a stabilising function in a crisis due to the complexities of using it and the risk of causing contagion;* enhanced proportionality by lowering the cost of capital for smaller b...