It will wipe out the concentration of AT1 instruments held by domestic retail investors. The proposal to phase out additional tier 1 (AT1) instruments by Australian regulators is unlikely to be replicated by other regulators,

Australia’s banking regulator has proposed lenders phase out the use of AT1 bonds — the kind of securities that were wiped out after Credit Suisse Group AG’s collapse — to strengthen their capital holdings in the event of a crisis.

If pushed through, the CET1 minimum requirement will rise to 10.50%. Australia’s proposal to phase out the use of Additional Tier 1 (AT1) instruments will have little impact on local banks, according to Fitch Ratings.

SINGAPORE banks are unlikely to face any near-term impact from a proposal by Australia’s banking regulator to phase out the use of additional tier-1 (AT1) bonds, analysts said. Read more at The Business Times.

Australia's prudential regulator is proposing to bar banks from issuing certain hybrid securities to help meet their capital requirements starting in 2027 as retail investors that typically buy them do not understand the risks of these instruments.