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.
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.
Supervision, Regulation & Credit