Identifying a buyer base for these innovative instruments – which, so far, only two banks have issued – is the Holy Grail of the bank capital market for 2011.
But the answer might already have been found at Barclays and Credit Suisse. The UK’s third-biggest lender is now in talks with the Financial Services Authority over a proposal to pay the bonuses of 1,000 of its senior bankers in CoCos. Credit Suisse is also rumoured to be looking at doing the same; its chairman Hans-Ulrich Doerig saying last month that he would buy contingent convertible bonds for his own account “as the ultimate litmus test of their solidity”.
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