G38

Corporate Finance and Governance: Government Policy and Regulation

Can creditor bail-in trigger contagion? The experience of an emerging market

The successful bail-in of creditors in African Bank, a small South African monoline lender, provides an opportunity to evaluate the intended and unintended consequences of new resolution tools. Using a data set that matches quarterly, daily and nancial-instrument level data, I show that the bail-in led to money-market funds `breaking the buck', triggering signicant redemptions and some nancial contagion.

The effectiveness of countercyclical capital requirements and contingent convertible capital: a dual approach to macroeconomic stability

This paper studies the effectiveness of countercyclical capital requirements and contingent convertible capital (CoCos) in limiting financial instability, and its associated influence on the real economy. To do this, I augment both features into a standard real business cycle framework with an equity market and a banking sector. The model is calibrated to real U.S.
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