French Banks Bail-in-able Capital Instruments Valuation with Credit Institutions System Pandemic Crisis Framework

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Since inaugural issuances, the Senior Non Preferred market prices showed wide volatility, highlighting the investors’ difficulty to price the additional risk of these instruments.


The 2007 financial crisis resulting in both the disorderly liquidation of a “too big to fail” institution, namely Lehman Brothers, and the huge use of tax-payer resources required to stabilize the worldwide financial system raised two questions for the regulators. First, how to prevent the tax-payer to bear the cost of credit institutions recapitalization ? Second, how to clear credit institutions capital instrument’s pricing from any bail-out prospects ?

A new resolution framework introducing a new “bail-in eligible” instruments

To answer these challenges, a new European ...

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Banque et Stratégie Nº382