Singapore reaffirms creditor hierarchy following Credit Suisse AT1 wipeout

Equity holders will absorb losses before AT1 and Tier 2 bondholders, MAS said.

The Monetary Authority of Singapore (MAS) reaffirmed that it will stick to the financial hierarchy regarding which investors will shoulder losses in the event that a financial institution (FI) collapses.

The equity holders will absorb losses before holders of additional tier 1 (AT1) and Tier 2 capital instruments, MAS said in a statement.

“Creditors who receive less in a resolution compared to what they would have received had the FI been liquidated would be able to claim the difference from a resolution fund that would be funded by the financial industry,” MAS said in a press release.

The creditor compensation framework will remain the same even in the “exceptional” situation where MAS will have to depart from the creditor hierarchy in order to contain the systemic impact of an FI’s failure, the financial regulator said.

ALSO READ: Write-off of CS AT1 securities no risk to SG banks: analyst

The statement comes days after Swiss banking giant Credit Suisse wrote down its AT1 bonds to zero.

Singapore reminded its banks offering and distributing AT1 bonds to make accurate and clear disclosure of key product features and risk to investors, and for investors to exercise due care in their selection of investment products.

Follow the link for more news on

Join Asian Banking & Finance community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!


Hong Kong’s livi bank launches game-changing app for SMEs
Going fully digital on opening accounts and approving quick loans to SMEs raises ‘livi Business’ disbursements to over HK$70m (US$8.9m) as of end-April.
3 principles guide Bank Aladin Syariah in tapping Indonesia’s customer segments
Within a year, the digital sharia bank got past low penetration to record 1.7 million customers and now targets multiple times growth by end-2023.
Bankers face sluggish hiring market, layoffs in Hong Kong
Industry insiders reveal how investment banks prioritize cost efficiency and productivity over hiring new employees.