The Unconvertible CoCo Bonds

Paul Glasserman and Enrico Perotti

Chapter 23 in Achieving Financial Stability:Challenges to Prudential Regulation, 2017, pp 317-329 from World Scientific Publishing Co. Pte. Ltd.

Abstract: The original concept of a CoCo (contingent convertible) bond was to act as a precommitted equity injection upon bank distress. Its intellectual foundation (Flannery 2005; Kashyap et al., 2008) was to induce conversion as “going concern,” ensuring de-leveraging at the most delicate moment, when default risk is heightened and risk-taking incentives highest…

Keywords: Money and Banking; International Banking; Financial Instititions; Banks; Regulations; Compliance; Financial Crisis; Great Financial Crisis 2008; Microprudential; Macroprudential; Financial Stability (search for similar items in EconPapers)
JEL-codes: E50 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (8)

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