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Capital and Bail in Debt Buffers: Loss Absorption vs Risk Incentives | Enrico Perotti

This online seminar offered a critical approach to capital requirements. It had a particular emphasis on risk absorption capacity in the context of the new Capital Requirements Directive (CRD4) and the Financial Stability Board’s Total Loss Absorbing Capacity (TLAC) standard. Two alternative views of capital requirements were lined out: the buffer view and the incentives view. As part of the webinar, the risk absorption potential of equity, bail-in debt and, Contingent Convertible Debt instruments (CoCos) were explored.

Enrico Perotti (Ph.D. MIT) is Professor of International Finance at the University of Amsterdam, Member of the Scientific Committee of the Florence School of Banking and Finance and CEPR).
His advisory work has focused on policy advice on issues of banking, financial reforms and stability to the EC, ECB, IMF, DNB, Bank of England, the World Bank and the UK Treasury.