Winter 2011

Winter 2011

Read about the changes in Tier 1 capital definitions resulting from Dodd-Frank, the causes and consequences of residential foreclosure problems and more in this edition of S&R Perspectives.

In This Issue

Dodd Frank Act Reforms: Trust Preferred Securities No Longer Tier 1 Capital

Trust preferred securities (TPS), a financial innovation of the 1980s, are long-term hybrid securities with features of both equity and debt. The Federal Reserve System allowed TPS to be treated as Tier 1 capital for bank holding companies (BHCs) in 1996. The definition of TPS in regulatory capital has been revised over the years with the most recent revisions occurring in 2005.

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