Hwang, Sunjoo - In: KDI Journal of Economic Policy 41 (2019) 4, pp. 1-44
The contingent convertible bond (or CoCo) is designed as a bail-in tool, which is written down or converted to equity if the issuing bank is seriously troubled and thus its trigger is activated. The trigger could either be rule-based or discretion-based. I show theoretically that the bail-in is...