How much pillar 2 can banks fill with AT1?
Need info on Basel III but specifically how much you can fill certain buckets with certain instruments.
Cant find a solid answer anywhere
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So under Pillar 1 its 4.5% CET1, 1.5% AT1, 2% T2 while the pillar 2 buffer is bank specific. Pillar 2 + the combined buffer must be met by CET1 (where the combined buffer is the globally/domestically systemically important bank buffer + the counter cyclical buffer).
So to answer your question, 0%. It must come from CET1
I would look into TRUPS. I know banks used preferred stock mechanisms like trups to get past the leverage cap. I don’t think big institutions employ them anymore but I’ve seen smaller banks make use of them till this day.
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