Contingent Convertibles (CoCos): Regulatory Issues

Contingent Convertibles (CoCos): Regulatory Issues

Intuition Publishing
Updated Sep 24, 2020

CoCos are a relatively new financial product, which attracted interest in the period after the global financial crisis as a way to meet tighter regulatory requirements. We explore the effects of Basel II and III on the market for CoCos, and discuss the reasons why CoCos are a concern to some regulators. We then compare CoCo's with Bail-Ins as a means to offset bankruptcy, and try to predict what the future may hold for CoCos.