Avoid too many rules on CoCo bonds: BoJ research
A paper published Friday by the Bank of Japan explores the concept of contingent capital, analysing the determinants of the interest rate at which contingent capital bonds may be issued, and the likely impact of such issuance on markets for other instruments.
Koichiro Kamada, the paper's author, argues that regulators should avoid placing too many restrictions on the design of contingent capital bonds, in order to maximise their benefits. "By doing so, regulators can encourage banks to look for
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