In this article, we analyze price triggers in contingent capital bonds. We illustrate the pervasiveness of multiple equilibria and the nonexistence of equilibrium in theoretical models. We summarize evidence of these problems from market experiments and we evaluate possible solutions.
Our Research Focus: Financial Regulation
Amanda L. Kramer
To receive a notification by email when Economic Quarterly is posted online or to order single copies of past issues, click on the links below (published online only since 2012).