Increasing Profitability Through Contingent Convertible Capital: Empirical Evidence From European Banks
| Autor: | Matthias Petras |
|---|---|
| Rok vydání: | 2018 |
| Předmět: |
040101 forestry
Economics and Econometrics 050208 finance Capital structure Tax shield Bond 05 social sciences Equity (finance) 04 agricultural and veterinary sciences Monetary economics Tier 1 network Incentive Capital (economics) 0502 economics and business Economics 0401 agriculture forestry and fisheries Profitability index Business Empirical evidence Convertible bond Finance |
| Zdroj: | SSRN Electronic Journal. |
| ISSN: | 1556-5068 |
| DOI: | 10.2139/ssrn.3245256 |
| Popis: | This study investigates the consequences of the use of additional tier 1 (AT1) capital instruments on bank profitability. It is motivated by fact that the use of contingent convertible bonds (CoCo-bonds) instead of equity offers a tax-shield and positive risk-taking incentives. I empirically analyse a panel dataset of 231 banks from EEA-countries as well as Switzerland from 2014 to 2018. My analysis shows that the potential tax-shield is a relevant determinant of the use of CoCo-bonds. Subsequently, I find that the use of CoCo-bonds instead of equity as AT1-capital has significant and positive effects on bank profitability. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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