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Strengthening Bank Regulation: OSFI's Contingent Capital Plan

Author

Listed:
  • John F. Chant

    (Simon Fraser University)

Abstract

Bank failures around the world during the recent financial crisis put taxpayers on the hook for trillions of dollars in government backstopping. In future, requiring banks to issue contingent capital, which would convert from debt to equity when banks run into trouble, is one way to help avoid that happening again, and limit taxpayer costs if it does, according to this paper. The author makes the case for contingent capital, critiques the current federal proposal, and makes recommendations for design that would help stave off disaster for banks, not hasten their demise.

Suggested Citation

  • John F. Chant, 2011. "Strengthening Bank Regulation: OSFI's Contingent Capital Plan," e-briefs 116, C.D. Howe Institute.
    • Handle: RePEc:cdh:ebrief:116
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    File URL: https://www.cdhowe.org/public-policy-research/strengthening-bank-regulation-osfi%E2%80%99s-contingent-capital-plan
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    References listed on IDEAS

    as
    1. Scott, Hal S. (ed.), 2005. "Capital Adequacy beyond Basel: Banking, Securities, and Insurance," OUP Catalogue, Oxford University Press, number 9780195169713.
    2. Franklin Allen & Elena Carletti & Finn Poschmann, 2009. "Marking to Market for Financial Institutions: A Common Sense Resolution," e-briefs 73, C.D. Howe Institute.
    3. Samuel G. Hanson & Anil K. Kashyap & Jeremy C. Stein, 2011. "A Macroprudential Approach to Financial Regulation," Journal of Economic Perspectives, American Economic Association, vol. 25(1), pages 3-28, Winter.
    Full references (including those not matched with items on IDEAS)

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