To enter the virtual seminar room, please use the following login credentials:
Zoom URL: https://uni-frankfurt.zoom.us/j/62538160195?pwd=b0ozTWlzUUhXRDFoY1lpQVlGRkU5UT09
Meeting ID: 625 3816 0195
On March 19th, UBS Group AG agreed to buy Credit Suisse for around 3bn CHF. The deal was facilitated by FINMA, the Swiss supervisory authority for banks and financial markets. This was necessary to avoid the collapse of Credit Suisse and, consequently, the possible national and international contagion.
The most contentious point of this construction lies in the fact that the holders of Contingent Convertible bonds (CoCos) were wiped-out even though shareholders retained a minimal claim on the bank. This was the first time in which Contingent Convertible instruments absorbed losses in going concern.
This project is in its very early stages and aims at drawing lessons from the Credit Suisse case in relation to the role of Contingent Convertible instruments in the prudential regulation of banks. Two key aspects will be discussed:
- The optimal contractual design of Contingent Convertibles when their enforcement depends on the actions of the supervisors;
- The key vulnerabilities of prudential regulation in handling banks in the vicinity of insolvency.
Background material on the topic of the seminar can be found here:
1. Martino E., Vos T. (2023), Credit Suisse Cocos: Why the Write Down Makes Sense, Oxford Business Law Blog, posted on 06.04.23
2. Martino E., Vos T. (2023) The Bail-In of Credit Suisse CoCos: why principal write-down makes sense. Columbia Law School Blue Sky Blog, posted on 12.05.2023