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Online seminar ‘The Future of CoCos’

On 1 March the FBF organised the online seminar ‘The Future of CoCos’, featuring a presentation by international finance expert Enrico Perotti (Professor of International Finance at University of Amsterdam) and a commentary by Simon Gleeson (Partner at Clifford Chance London), a legal expert and practitioner in financial services and banking regulation.

Although in theory CoCo bonds constitute an ideal risk-absorbing instrument, the seminar will assess under which exact design conditions they can practically support ‘going concern’ restructuring and market discipline, ultimately trying to assess whether they can really contribute to financial stability. The speakers assessed the evolution and the future prospectives for Contingent Convertible (CoCo) bonds, which in theory constitute an ideal risk-absorbing instrument, providing more agility and flexibility to banks in distress while improving the resilience of the banking system through their preventive effects. During his presentation, Professor Perotti discussed the design conditions under which CoCo bonds can practically support ‘going concern’ restructuring and market discipline.

In the lively interactive Q&A session that followed, moderated by Pierre Schlosser (Scientific Coordinator, Florence School of Banking and Finance), participants showed a great interest in knowing whether CoCo bonds can really contribute to financial stability.

The presentation attracted participants from 39 countries, who were asked to provide their feedback on a series of polls regarding, among others, the usefulness of CoCo bonds as a risk management tool and whether CoCo bonds should primarly target risk prevention or protect tax payers through risk absorption at default.

The full recording of the event is available here:

Download the slides of the presentation

Download the Paper