Contingent Convertibles. Solving or Seeding the Next Banking Crisis? PoorSatisfactoryGoodVery GoodExcellent Be the first. (0 ratings) Log in to rate this article. CFA Digest August 2012 Source: CFA InstituteChristian Koziol Jochen LawrenzThomas M. Arnold, CFA (Reviewer) Read Abstract The authors model bank behavior under complete and incomplete contracts to evaluate the use of contingent convertible (CoCo) bonds. If contracts are complete, CoCo bonds, compared with standard bonds, increase a bank’s value and lower the possibility or severity of financial distress. But under incomplete contracts, CoCo bonds may encourage the bank to seek additional risk because there is no threat of losing its equity. View more information Topics Corporate Finance : Introduction to Investment Banking · Long-Term Financial Policy · Valuation Implications of Corporate Finance Credits · About the CE Program 0 CE (including 0 SER) Record credits Credits recorded Members, log in to record your credits. Manage CE Credits Loading ...