Going-concern triggers on CoCos unrealistic, says White
Contingent capital instruments designed to provide a capital boost before the point of non-viability are laudable but unrealistic, says former RMMG chair Mark White
Contingent capital instruments (CoCos) that provide a capital boost to a bank before it reaches the point of non-viability might not be realistic, according to the outgoing chair of the Basel Committee on Banking Supervision's risk management and modelling group (RMMG).
CoCos are debt instruments that convert into equity or are written down once a certain trigger is breached, such as a fall in regulatory capital beyond a pre-determined level. The idea is to provide a capital injection while the
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