News

The write-off of Credit Suisse hybrid notes has raised once more the issue of who provides additional tier-one capital to Australian banks and insurers. But market users insist hybrid investors as a group are more sophisticated than they are often given credit for, highlighting the local market’s relatively muted response in recent weeks as a sign of its rationality.

On 20 March, Australians awoke to learn that Credit Suisse and UBS were to merge. The merger followed the intervention of the Swiss authorities. Its purpose was to cure the crisis of confidence that was engulfing Credit Suisse. When the merger completes, Credit Suisse will cease to exist and its business will be run by UBS.