Banks will no longer be able to raise funding from hybrid securities, a product popular among retail investors but one that the prudential regulator has deemed too risky for the financial system in the event of a crisis.
The $43 billion bank hybrid market – which is combination of debt and equity – will be phased out between now and 2032, the Australian Prudential Regulation Authority said on Monday.
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John Kehoe is economics editor at Parliament House, Canberra. He writes on economics, politics and business. John was Washington correspondent covering Donald Trump’s election. He joined the Financial Review in 2008 from Treasury. Connect with John on Twitter. Email John at jkehoe@afr.com
Jonathan Shapiro writes about banking and finance, specialising in hedge funds, corporate debt, private equity and investment banking. He is based in Sydney. Connect with Jonathan on Twitter. Email Jonathan at jonathan.shapiro@afr.com