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2 Comments
Amen to that. I don't have access to this article as a non-subscriber, but the headline is good news! I am assuming that our RBNZ won't allow the sale of investments commonly refered to as CoCo bonds aka Collatarised Contingency Bonds which would allow our banks to sell these bonds to unsuspecting investors and then at the first sign of trouble, the banks would use these debt instruments to bail themselves out and leave the investors high and dry with no comeback. Deutsche Bank has been selling alot of these to raise capital which is keeping them afloat for now.
I don't have access either TB, didn't know what Contingency Debt was so looked it up and it sounds like counting the potential proceeds of a gambling bet as capital.
I didn't think of selling the bet/contract on, but nice work if you can get it I suppose. Although if that contract can be wound backwards if it goes pear shaped then it's still just unrealised gambling income. Hard to imagine why they would be allowed to call it capital.
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