Credit Suisse bondholders sue Switzerland over $17 billion AT1 wipeout

On August 31, 2023, Credit Suisse Group AG faced a setback in Switzerland when a case was filed against the Swiss government regarding the handling of a bank’s Additional Tier 1 (AT1) bonds. The Swiss regulator, FINMA, decided to exclude $17 billion worth of AT1 bonds from the bank’s balance sheet, causing losses for bondholders. This decision also raised concerns about the regulatory framework for banks under Basel III rules. The situation led to legal action and criticism from bondholders and experts, highlighting the risks associated with AT1 bonds. The dispute over AT1 bonds reflects the challenges faced by financial institutions in balancing risk and regulatory requirements.


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