This paper adds to the growing body of literature on the design of Contingent Convertible Bonds (CoCos). We discuss how the design of the loss absorption mechanism affects the stability of bank funding and distinguish between Conversion-to-Equity (CE) CoCos, Principal WriteDown (PWD) CoCos with...

Basel III has introduced a non-risk-weighted leverage ratio requirement (LRR) which complements the internal ratings based (IRB) capital requirements. It provides a backstop against model risk which arises if some loans get incorrectly rated and become toxic. We study the effects of the LRR on...

The institutional framework for the functioning of covered bonds (list zastawny - L.Z.) in Poland was established already in 1997 and first issues took place in 2000; by 2013, L.Z. accounted for a few percent of property market funding, mostly with respect to commercial property. The latest...

We analyze an oligopolistic microcredit market characterized by asymmetric information and institutions that can offer only one type of contract. We study the effects of competition on contract choice when small entrepreneurs can borrow from more than one institution due to the absence of credit...

We analyze the effects of entry in a previously monopolistic microcredit market characterized by asymmetric information and by institutions that offer only one type of contract. We consider different behavioral assumptions concerning the Incumbent and study their influence on equilibrium...

This simulation-based paper investigates the impact of different methods of dynamic provisioning on bank soundness and shows that this increasingly popular macroprudential tool can smooth provisioning costs over the credit cycle and lower banks’ probability of default. In addition, the...

This paper discusses key findings of the Financial System Stability Assessment on Cyprus. The assessment reveals that the banking system of Cyprus has managed to avoid the worst effects of the global financial crisis, but stress tests confirmed that credit risk remains high. The assessment...

The Republic of Tajikistan’s Financial System Stability Assessment and reports on the Observance of Standards and Codes are examined. The Tajik financial system is small despite recent rapid growth. Overall, banks remain well capitalized and liquid, but the brisk expansion of their loan...

Policies implemented over the last decade have strengthened economic fundamentals and brought macroeconomic stability. Major improvements in compliance with the Basel Core Principles for Effective Banking Supervision and the implementation of International Organization of Securities Commission...