About AT1 bonds
- These bonds are unsecured bonds that have perpetual tenors, are issued by banks and have no maturity date.
- They have a call option, which can be used by the banks to buy these bonds back from investors. These bonds are typically used by banks to bolster their core or tier-1 capital.
- These AT1 bonds are subordinate to all other debt and only senior to common equity.
- These bonds were introduced by the Basel accord after the global financial crisis to protect depositors.
Q1) What is the Basel Accord?
It refers to a series of three international banking regulatory meetings that established capital requirements and risk measurements for global banks.
Source: Additional Tier-1 bonds, and the case against Yes Bank
Last updated on July, 2025
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