We highlight the ex ante risk-shifting incentives faced by a bank's shareholders/managers when CoCos (contingent …

We highlight the ex ante risk-shifting incentives faced by a bank's shareholders/managers when CoCos (contingent …

their lending to the real estate sector during the 1990s. We argue that this phenomenon can be explained by the risk-shifting … incentives of banks and discover that banks with low capital-to-asset ratios and low franchise value chose high-risk assets such …

This paper analyzes the effects on ex ante risk-shifting incentives and ex post fiscal costs of three policies that are …