On 3 December EY hosted a SUERF conference on banking reform with Sir Howard Davies, the Chairman of RBS, and Dame Colette Bowe, the Chairman of the Banking Standards Board, as the two keynote speakers. Professor David Miles (Imperial College) gave the SUERF 2015 Annual Lecture on Capital and...

We analyze the optimal capital structure of a bank issuing countercyclical contingent capital, i.e., notes to be converted in common shares in case of a bad state for the economy. This type of asset reduces the spread of straight debt but is quite expensive. The effect on bankruptcy costs is...