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Document type:
Zeitschriftenaufsatz 
Author(s):
Berg, Tobias; Kaserer, Christoph 
Non-TUM Co-author(s):
ja 
Cooperation:
national 
Title:
Does contingent capital induce excessive risk-taking? 
Abstract:
In this paper, we analyze the effect of the conversion price of CoCo bonds on equity holders’ incentives. First, we use an option-pricing context to show that CoCo bonds can magnify equity holders’ incentives to increase the riskiness of assets and decrease incentives to raise new equity in a crisis in cases in which conversion transfers wealth from CoCo bond holders to equity holders. Second, we present a clinical study of the CoCo bonds issued so far. We show that (i) almost all existing CoCo...    »
 
Keywords:
Contingent capital; Banking regulation; Risk-taking incentives; Asset substitution; Debt overhang; Credit crunch 
Dewey Decimal Classification:
330 Wirtschaft 
Intellectual Contribution:
Discipline-based Research 
Journal title:
Journal of Financial Intermediation 
Journal listet in FT50 ranking:
nein 
Year:
2015 
Journal volume:
24 
Year / month:
2015-07 
Journal issue:
Pages contribution:
356-385 
Language:
en 
Key publication:
Ja 
Peer reviewed:
Ja 
International:
Ja 
Book review:
Nein 
Commissioned:
not commissioned 
Professional Journal:
Nein 
Interdisciplinarity:
Nein 
Mission statement: