Strengthening Bank Regulation: OSFI's Contingent Capital Plan

John Chant
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John Chant: Simon Fraser University

No 116, e-briefs from C.D. Howe Institute

Abstract: Bank failures around the world during the recent financial crisis put taxpayers on the hook for trillions of dollars in government backstopping. In future, requiring banks to issue contingent capital, which would convert from debt to equity when banks run into trouble, is one way to help avoid that happening again, and limit taxpayer costs if it does, according to this paper. The author makes the case for contingent capital, critiques the current federal proposal, and makes recommendations for design that would help stave off disaster for banks, not hasten their demise.

Keywords: Financial Services; bank failures; contingent capital; Office of the Superintendent of Financial Institutions (OSFT) (search for similar items in EconPapers)
Pages: 5 pages
Date: 2011-05
New Economics Papers: this item is included in nep-ban
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Published on the C.D. Howe Institute website, May 2011

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Persistent link: https://EconPapers.repec.org/RePEc:cdh:ebrief:116

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