Contingent capital instruments for large financial institutions: A review of the literature

MJ Flannery - Annu. Rev. Financ. Econ., 2014‏ - annualreviews.org
As the recent financial crisis unfolded, a new financial instrument—contingent convertible
(coco) bonds—was widely considered as a mechanism for promptly recapitalizing …

On the design of contingent capital with a market trigger

S Sundaresan, Z Wang - The Journal of Finance, 2015‏ - Wiley Online Library
Contingent capital (CC), which aims to internalize the costs of too‐big‐to‐fail in the capital
structure of large banks, has been under intense debate by policy makers and academics …

Stabilizing large financial institutions with contingent capital certificates

MJ Flannery - The most important concepts in finance, 2017‏ - elgaronline.com
Corporate limited liability makes firms' shareholders under-value the possibility that their
actions will have extremely bad outcomes. This distortion has been particularly relevant for …

Contingent Convertible bond literature review: making everything and nothing possible?

P Oster - Journal of Banking Regulation, 2020‏ - Springer
Abstract Contingent Convertible (CoCo) bonds are subject to a considerable theoretical and
practical debate. This article presents a systematic literature survey from five databases …

Contingent capital, tail risk, and debt-induced collapse

N Chen, P Glasserman, B Nouri… - The Review of Financial …, 2017‏ - academic.oup.com
We study the design and incentive effects of contingent convertible debt. With contingent
convertibles, the endogenous bankruptcy boundary can be at either of two levels: one with …

Market‐triggered changes in capital structure: Equilibrium price dynamics

P Glasserman, B Nouri - Econometrica, 2016‏ - Wiley Online Library
We analyze the internal consistency of using the market price of a firm's equity to trigger a
contractual change in the firm's capital structure, given that the value of the equity itself …

Maintaining adequate bank capital

MJ Flannery - Journal of Money, Credit and Banking, 2014‏ - Wiley Online Library
THE BASEL COMMITTEE ON BANK SUPERVISION (BCBS) has complex rules for defining
sufficient capital at internationally active financial institutions. Pillar II of the Basel Accord …

Do CoCos serve the goals of macroprudential supervisors or bank managers?

L Allen, A Golfari - Journal of International Financial Markets, Institutions …, 2023‏ - Elsevier
Using a hand-collected, comprehensive sample of contingent capital bonds (CoCos) issued
by banks over the 2009–2019 period, we identify shifts in CoCo design features that nullify …

Market‐Triggered Contingent Capital with Incomplete Information

T Berg, E Schliephake - Journal of Money, Credit and Banking, 2024‏ - Wiley Online Library
We analyze the equilibria of market‐triggered contingent capital if a bank's asset value is not
common knowledge. Using a global game setup with private signals, we characterize the …

Contingent capital with repeated interconversion between debt‐and equity‐like instruments

Y Cai, Z Yang, Z Zhao - European Financial Management, 2019‏ - Wiley Online Library
This paper introduces a new form of contingent capital, contingent convertible securities
(CCSs), which might repeatedly convert between debt‐and equity‐like instruments …