Contingent Capital Instruments: pricing behaviour

In the crisis aftermath, majority of analysis revealed and highlighted the high leverage level used by Financial Institutions in other words the lack of capital in the banking industry. This has quickly been presented as the prime lesson that Financial Institutions should hold much more capital in order to make banks safer in adverse situations. Consequently, policymakers such as the Basel Committee on Banking Supervision introduced new capital requirements which are supposed to prevent and ease resolution process in case of adverse situation would reoccur. Those new capital requirements for the ...