Ludolph, Melina - Leibniz-Institut für Wirtschaftsforschung Halle - 2023 - This version: August 27, 2023
This paper examines the effect of CoCo bonds that qualify as additional tier 1 capital on bank fundamentals. The results reveal a significant reduction in the distance to insolvency following the hybrid bond issuance due to increased earnings volatility. Further analyses suggest a link between...