Regulatory Alerts2022-12-07
The Co-operative Bank Submission on Mutual Capital Instruments
The Co-operative Bank Limited submitted to the Reserve Bank of New Zealand regarding the regulatory framework for Mutual Capital Instruments (MCIs) qualifying as CET1 capital. The submission advocates for adopting features from Australian and UK mutual instruments, specifically supporting the Mutual Equity Instrument model with discretionary dividends and capped investor claims. It argues that current capital requirements disadvantage mutual banks by conflicting with co-operative principles and calls for the removal of arbitrary caps on distributions and issuance amounts.
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