|
EconStor >
Deutsche Bundesbank, Forschungszentrum, Frankfurt am Main >
Discussion Paper Series 2: Banking and Financial Studies, Deutsche Bundesbank >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/44598
|
| | |
| Title: | | Contingent capital to strengthen the private safety net for financial institutions: Cocos to the rescue?  |
| Authors: | | von Furstenberg, George M. |
| Issue Date: | | 2011 |
| Series/Report no.: | | Discussion Paper Series 2: Banking and Financial Studies 2011,01 |
| Abstract: | | This study examines the promise of reducing expected resolution costs of financial institutions through either voluntary or mandated addition of contingently convertible debt securities to their long-term financing mix. I model the stochastic process by which an initially very well capitalized banking firm may come to violate its minimum capital maintenance requirement. Conversion of cocos then provides a second chance because the firm's initial capitalization is restored. Although regulatory insolvency remains a distant threat, the expected reductions in the cost of bankruptcy and hence the cost of capital are such that cocos may win a place in the liability structure of financial institutions without the need for mandates. |
| Subjects: | | financial reforms regulatory insolvency contingent capital bank regulations cocos |
| JEL: | | E44 G33 G38 |
| ISBN: | | 978-3-86558-679-7 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Discussion Paper Series 2: Banking and Financial Studies, Deutsche Bundesbank
|
| Files in This Item:
| |
|
| No. of Downloads:
| |
| last Month |
last 3 Month |
total |
|
|
|
|
|
| |
| | |
Download bibliographical data as:
BibTeX
|
| |
Share on:http://hdl.handle.net/10419/44598
|
Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.
|