Contingent Capital: Economic Rationale and Design Features

Ceyla Pazarbasioglu, Jianping Zhou, Vanessa Le Lesle and Michael Moore

No 2011/001, IMF Staff Discussion Notes from International Monetary Fund

Abstract: The causes of the global financial crisis were multi-faceted but revealed still unresolved weaknesses in national and international financial oversight and resolution frameworks. In particular, many governments in the crisis-hit countries had to provide unprecedented levels of support to contain the crisis and protect financial stability. These interventions have not only contributed to a significant increase in sovereign exposures but, in many countries, they have also risked weakening market discipline and worsening moral hazard.

Keywords: SDN; capital; equity capital; share price; capital ratio (search for similar items in EconPapers)
Pages: 34
Date: 2011-01-25
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