KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
Europe’s top bank resolution official is seeking clarity from the United States to ensure that US regulators will not obstruct write-downs of Additional Tier 1 (AT1) bonds during future bank failures, a crucial mechanism used to safeguard financial stability.
Background: Lessons from Credit Suisse
Dominique Laboureix, chair of the Single Resolution Board (SRB), said in an interview that the issue has been raised at the Financial Stability Board (FSB), where a working group is “seriously” addressing potential cross-border obstacles.
The move follows lingering uncertainty since the 2023 collapse of Credit Suisse, where AT1 bondholders were fully wiped out to facilitate the bank’s rescue.
With the Trump administration’s reorientation of US regulatory priorities, European officials are now seeking renewed assurance that Washington will continue to uphold global resolution standards.
“You cannot achieve 100% comfort all around the globe with all the authorities,” Laboureix said. “You need to accept a certain variable of risk.”
Regulatory Dialogue and Extraterritorial Concerns
At the heart of the discussions is a Great Depression–era US law allowing Washington to exert extraterritorial influence over securities issued in the US or owned by its citizens — potentially complicating loss imposition on cross-border investors.
Laboureix said talks with the US Securities and Exchange Commission (SEC) began after the Credit Suisse crisis and are ongoing, alongside a “permanent dialogue” with the Federal Reserve.
He is also scheduled to meet the Federal Deposit Insurance Corporation (FDIC) and the US Treasury this week.
“Financial stability is a common good and I think it’s well understood by all of us,” he added.
AT1 Market Confidence
Laboureix reaffirmed that AT1 instruments — hybrid securities designed to absorb losses when a bank’s capital falls below a threshold — remain an essential part of banks’ capital structure.
His remarks come as Australia’s regulator moves to phase out AT1s, citing their complexity.
“I frequently hear that AT1s are very complex,” Laboureix said. “Yes, they are. So let’s discuss the technical features instead of deleting them.”
Investor Takeaway
The EU aims to preserve global enforceability of AT1 bond write-downs to prevent fragmentation in future bank resolutions.
US cooperation is key, as many European banks issue dollar-denominated AT1s.
Despite regulatory scrutiny, Laboureix defends AT1s as a vital capital buffer in Europe’s financial system.
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