Opinion
Higher yielding hybrids are coming
It would be preposterous to permit retail investors to buy highly leveraged bank shares and yet concurrently restrict them from investing in demonstrably less risky hybrids and bonds.
Christopher JoyeColumnistThe Australian Prudential Regulation Authority has announced a detailed consultation process on how to improve the functioning of the hybrid securities market.
As Jonathan Shapiro reported, the regulator is considering three policy options: changing the design of hybrids so that they more effectively absorb losses; forcing the banks to reduce their reliance on hybrids for their capital buffers; and changes that would shift the investor base away from retail investors.
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