Can you plz explain how redeeming the trust shares iis needed for RBS,nv to have adequate equity capital? Do Dutch banking regs treat preferred shares the same as debt? If RBS.nv has excesss cash, isn't it better for it to pay down debt and improve its capital base that way, rather than pay down preferred shares?
Trust Preferred have essentially lost their tier 1 capital status.
Banks will now be assessing their ability to optimize their capital position and take advantage of low rates when possible. Its just a matter of how long it takes the bank to get its ratings upgraded, so that they can borrow at lower rates.