Supplement: Capital Strategies For Banks - Hybrid Capital Hits The Target - ABN AMRO's Ronan...

Hybrid capital is not a new concept for most US and European banks but the role it is playing and the structures employed have undergone considerable evolution since the first wave appeared in the US in the mid-to-late 1990s. Driven by a rapidly changing banking landscape, including the impending provisions of the Basel II Accord and IAS accounting, hybrid capital has now entered a new phase.

At its outset, hybrid capital was something of a revolutionary concept. The appeal of a product that enabled banks to raise non-dilutive capital with a tax-deductible servicing cos