We argue that contingent convertible capital (CoCo-Bonds) might have perverse risk-taking incentives for banks (asset … overhang problem). Whenever the conversion price is set too high - as in the case of the Lloyds CoCo-Bond issuance in November …-Bond convert into equity once the equity ratio falls below a certain threshold and CoSu-Bond holders take over the bank while …

lacking empirical support. We conclude that bank equity is not socially expensive, and that high leverage at the levels …

disciplining role are based on inadequate theory lacking empirical support. We conclude that bank equity is not socially expensive …

We argue that contingent convertible capital (CoCo-Bonds) might have perverse risk-taking incentives for banks (asset … overhang problem). Whenever the conversion price is set too high - as in the case of the Lloyds CoCo-Bond issuance in November …-Bond convert into equity once the equity ratio falls below a certain threshold and CoSu-Bond holders take over the bank while …

lacking empirical support. We conclude that bank equity is not socially expensive, and that high leverage at the levels …

disciplining role are based on inadequate theory lacking empirical support. We conclude that bank equity is not socially expensive …

empirical support. We conclude that bank equity is not socially expensive, and that high leverage at the levels allowed, for …

Shadow banking is a broad concept. A possible definition is that it comprises non-bank institutions which undertake … bank-like activities. Another characteristic is that the sector is overall less regulated. Therefore there are still …

, associated with the equity-conversion and writedown CoCo bonds. By focusing on the costs as those stemming from the deviation … from absolute priority rule (DAPR), we derive the expressions for the CoCo bonds and show that both agency costs are …