As the demise of Credit Suisse reverberated from Sydney to New York City on Monday, workers were given a clear message: get back to work.Losses of this magnitude are unsettling to markets already shaken by the latest banking crisis.
Or how about Credit Suisse’s own employees? For years, senior executives were paid in part in AT1 notes, Semafor reported. The news outlet did not offer concrete figures.Fortunately, banks are unlikely candidates, in that they are heavily penalised for owning peers’ capital instruments. In Japan, investing in another lender’s AT1 notes carries a 1250 per cent risk weight. This means banks must hold $US1.25 of their own equity for every dollar of AT1 notes they have in their securities portfolio.
This leads us to the ultrarich. Wealthy individuals as well as small to mid-sized family offices in Hong Kong and Singapore have gobbled them up, and a lot of them are “in shock,”A recent JPMorgan Chase report said, “We do not have data on who holds AT1, but we expect it to be held by institutional investors as well as private bank clients”.
For years, Asia’s wealthy have been the profit centre at Credit Suisse’s crown-jewel wealth management division. They have been shaken by this fallout, unsure for weeks whether their money was safe with the Swiss bank.
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Source: FinancialReview - 🏆 2. / 90 Read more »