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A market-oriented solution for the too-big-to-fail problem

1 Jun 2015
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As APRA moves to tighten rules on bank capital levels, a new class of convertible bonds comes to the rescue, promising to avoid taxpayer-funded bailouts without the heavy-handed — and costly — regulations on the private sector. The Australian financial watchdog should embrace the newcomer, allowing banks to use these novel convertible bonds to meet the higher capital levels recommended by the recent Financial System Inquiry.

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2015
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