Contingent Convertible Bonds as an Alternative to Strengthen Banks' Ability in Financing a Real Economy
Contingent Convertible Bonds as an Alternative to Strengthen Banks' Ability in Financing a Real Economy

Summary/Abstract: he main goal of this paper is to analyse whether Contingent Convertible Bonds (CoCos) are equally safe for banks and for the real economy because of their, sometimes, uneasy to understand features. Main methods are studies of the available literature, especially recommended by Calomiris & Herring (2013) and Borio (2013). A particular attention has been paid to various models of CoCos. Findings confirm that there are still unidentified threats connected with CoCos that could jeopardize future proper functioning of a financial system and then – a real economy. Still, if not materialized, these threats will by easily outweighed by advantages for resistant balance sheets of banks.

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