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Asia-PacificOctober 12 2023

Australia considers AT1 overhaul after recent banking crises

The country is an outlier internationally, with a large proportion of AT1s held by domestic retail investors. Regulator Apra believes this would make it particularly challenging to use AT1s during the recapitalisation of a bank in resolution.
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Australia considers AT1 overhaul after recent banking crisesImage: Getty Images

Australian banks could see a rise in capital costs as the Australian Prudential Regulation Authority (Apra) sets its sights on revamping the country’s Additional Tier 1 (AT1) capital market.

Prompted by the recent write-off of Credit Suisse’s hybrid instruments, Apra has published a discussion paper highlighting possible reforms to Australian banks’ hybrid securities to ensure they are “fit for purpose”. 

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