| 来源类型 | Discussion paper |
| 规范类型 | 论文 |
| 来源ID | DP8028 |
| DP8028 Contingent Capital: The Case for COERCs | |
| Christian Wolff; George G. Pennacch | |
| 发表日期 | 2010-09-23 |
| 出版年 | 2010 |
| 语种 | 英语 |
| 摘要 | In this paper we propose a new security, the Call Option Enhanced Reverse Convertible (COERC). The security is a form of contingent capital, i.e. a bond that converts into equity when the market value of equity relative to debt falls below a certain trigger. The conversion price is set significantly below the trigger price and, at the same time, equity holders have the option to buy back the shares from the bondholders at the conversion price. Compared to other forms of contingent capital proposed in the literature, the COERC is less risky in a world where bank assets can experience sudden jumps. Moreover, the structure eliminates concerns about putting the company in a ?death spiral? as a result of manipulation or panic. A bank that issues COERCs also has a smaller incentive to choose investments that are subject to large losses. |
| 主题 | Financial Economics |
| 关键词 | Banks Financial crisis Financial stability Security design |
| URL | https://cepr.org/publications/dp8028 |
| 来源智库 | Centre for Economic Policy Research (United Kingdom) |
| 资源类型 | 智库出版物 |
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/536865 |
| 推荐引用方式 GB/T 7714 | Christian Wolff,George G. Pennacch. DP8028 Contingent Capital: The Case for COERCs. 2010. |
| 条目包含的文件 | 条目无相关文件。 | |||||
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