Will Thailand's upper tier 2 capital bonds blossom in 2001?

After a change in regulation last year, Thailand''s banks can issue upper tier 2 debt. Only one has so far. More are set to follow.

Back in August last year, the Bank of Thailand introduced changes to legislation that were designed to make it easier for the country's financial institutions to raise capital. By allowing them to sell instruments of upper tier 2 capital, essentially unsecured subordinated debt, the central bank was offering institutions a way to meet their capital requirements, something necessitated by the difficulty in raising equity through the stock market.

One would presume that, armed with this new tool, commercial banks...

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