High Wire Act: Credit Suisse and Contingent Capital (A) Harvard Case Solution & Analysis

In late 2010, Credit Suisse Brady Dougan CEO and his team closed in on the decision whether or not to issue contingent capital that regulators require the Swiss in 2019. There were a number of significant issues facing Dougan and his team, including the issue of contingent capital will provide sufficient loss absorption when called, will be enough demand for this new instrument, it would be cost-effective capital, and what are the risks to the credit Suisse reputation with customers and regulators, if the issue is not good? In addition, the Basel Committee, the body that recommended international standards of bank capital, and decided that much of the existing bank "hybrid debt" will no longer be considered as capital for regulatory purposes, that is, banks will be required to replace that portion of their equity to other forms of capital . However, Basel has yet to decide whether the conditional capital will be allowed in the new "Basel III" regulations. "Hide
by Clayton Rose, Aldo Sesia Source: Harvard Business School 23 pages. Publication Date: August 18, 2011 . Prod. #: 312007-PDF-ENG

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