This paper is divided into threefold, the first of which depicts a panorama about banks' economic role and the importance of bank capital through a literature review. In the second section, an analysis of hypothetical bank balance sheet structure concerning a representative bank along with an...

Our study is motivated by banking regulation that emphasizes risk minimization practices associated with assets and regulatory capital. In an attempt to address the problem of compliance to minimum capital adequacy ratios (CAR) and under assumptions about retained earnings, loan-loss reserves,...

This paper is based on the study of Hilscher and Raviv (2014) and Tan and Yang (2015) to investigate the effects of contingent capital, a debt instrument that automatically converts into equity if the value of the asset is below a predetermined threshold on the pricing process of a bank assets'....