Academic Scientific JournalsThe role of contingent convertible securities in the process of single resolution of banks
Keywords:
contingent convertibles, CoCos, bail-in, bail-outAbstract
Contingent convertible securities (CoCos) have been present on the capital market for no more than 10 years. According to a study of November 2017 by the Bank for International Settlements in Basel, in the years 2009–2015, CoCos of total value of USD 521 000 000 000 were sold in 731 issues over the world. The aim of the article was to present the role of contingent convertible securities in the process of single resolution of banks. The authors, based on the available literature, have presented the reasons behind the emergence of these innovative securities on the market, their essence and forms, legal regulations concerning issues and the conditions for qualifying them as Tier 1 capital, the pros and cons from the perspective of the issuers and purchasers, the associated risk, as well as the possibilities of CoCos issues in Poland.
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