Sentence examples for capital instruments from inspiring English sources
Convertible capital instruments, usually known as Cocos, are the simpler of the two.
Profit Participating Deferred Shares (PPDS) are capital instruments that building societies will be able to issue to strengthen their balance sheets.
There are several options – among them a global insurance levy, the use of innovative contingent capital instruments developed in the UK, and a global transactions tax.
They are issuing bail-in securities, known as cocos (contingent, convertible, capital instruments) that convert into equity once a bank's capital falls below a certain level.
Contingent capital instruments address this problem by converting into some form of capital if a bank's reserves fall below a predetermined level.
The memorandum states: "Banks and their shareholders will take losses before state aid measures are granted and ensure loss absorption of equity and hybrid capital instruments to the full extent possible".
Royal Bank of Scotland has climbed 2.8p to 345p as it said its business plan did not call for the issuance of capital instruments although this remained an option.
"There are several options – among them a global insurance levy, the use of innovative contingent capital instruments already developed in the UK, and a global transactions tax," Myners said.
A large chunk of the £5.8bn investment will buy "reserve capital instruments", similar to the preference shares which the UK government is taking in RBS and Lloyds TSB-HBOS.
The real task is finding a way to impose losses on banks' owners and creditors rather than making calls on taxpayers.Tools are being developed in the form of convertible-capital instruments and bail-in debt, whereby creditors of struggling banks are turned into shareholders if losses rise high enough.
Barclays said Tuesday that after "a number of meetings and conversations" with it major institutional shareholders, it was now making 500.0 million pounds ($748.2 million) of reserve-capital instruments paying 14.0% interest per coupon annually, which had been offered to the investors from Abu Dhabi and Qatar, available to its existing stakeholders.
