| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 5089698 | Journal of Banking & Finance | 2012 | 15 Pages |
Abstract
⺠We analyze contingent convertible (CoCo) bonds in a continuous-time framework. ⺠We show that CoCo bonds increase risk-taking incentives. ⺠Even though CoCo bond issues might increase the bank value, the probability of financial distress can increase. ⺠Thus, CoCo bonds are not unambiguously beneficial for banking stability.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Christian Koziol, Jochen Lawrenz,