Díaz, Fernando; Ramírez, Gabriel; Daniels, Kenneth - Facultad de Economía y Empresa, Universidad Diego Portales - 2013
We propose a clawback-type security (COCLA) as an alternative source of contingent capital for banks. We develop a equilibrium model that contains several distinctive features not found in the existing literature. A bank owner/manager maximizes her expected utility by choosing the bank’s loans...