We discuss the current funding practice of banks, looking at the typical capital structure of banks, examining where CoCos will likely fit within this structure and giving examples of recently issued CoCos. We explore the key design choices of bank CoCos analysing the potential problems that...

We describe some recent contingent capital securities (CoCos) and explore the issues that confront their development. We take the view that bank CoCos should be designed to maintain confidence in a bank before a crisis begins because once a crisis commences it is difficult to see how a bank can...