Strengthening Bank Regulation: OSFI's Contingent Capital Plan
AbstractBank failures around the world during the recent financial crisis put taxpayers on the hook for trillions of dollars in government backstopping. In future, requiring banks to issue contingent capital, which would convert from debt to equity when banks run into trouble, is one way to help avoid that happening again, and limit taxpayer costs if it does, according to this paper. The author makes the case for contingent capital, critiques the current federal proposal, and makes recommendations for design that would help stave off disaster for banks, not hasten their demise.
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Bibliographic InfoPaper provided by C.D. Howe Institute in its series e-briefs with number 116.
Length: 5 pages
Date of creation: May 2011
Date of revision:
Publication status: Published on the C.D. Howe Institute website, May 2011
Financial Services; bank failures; contingent capital; Office of the Superintendent of Financial Institutions (OSFT);
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- Scott, Hal S. (ed.), 2005. "Capital Adequacy beyond Basel: Banking, Securities, and Insurance," OUP Catalogue, Oxford University Press, number 9780195169713.
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