Policy & Press

Policy and Press:


Banking the Unbanked: The Past and Future of the Free Checking Account

With Stein Berre and Rajashri Chakrabarti

Federal Reserve Bank of New York Liberty Street Economics, June 30, 2021

The Costs of Corporate Debt Overhang Following the COVID-19 Outbreak

With João A.C. Santos

Federal Reserve Bank of New York Liberty Street Economics, December 01, 2020

How Has COVID-19 Affected Banking System Vulnerability?

With Matteo Crosignani, Fernando M. Duarte, Thomas M. Eisenbach, Fulvia Fringuellotti, and Anna Kovner

Federal Reserve Bank of New York Liberty Street Economics, November 16, 2020

Banking System Vulnerability: Update

With Fernando M. Duarte, Thomas M. Eisenbach, and Anna Kovner

Federal Reserve Bank of New York Liberty Street Economics, December 18, 2019


Der Steinige Weg zum Wohneigentum

with Martin Brown

Saturday edition of the NZZ


Wer nicht erbt, kann nicht kaufen

with Martin Brown

Ökonomenstimme




Policy Directed Research:

Announcement Effects of Contingent Convertible Securities: Evidence from the Global Banking Industry

(with Manuel Ammann and Christian Ehmann)

Abstract: This paper investigates the announcement effects of contingent convertible securities (CoCo bonds) issued by global banks between January 2009 and June 2014. Using a sample of 34 financial institutions and 87 CoCo bond issues, we examine abnormal stock price reactions and CDS spread changes before and after the announcement dates. We find that the announcement of CoCo bonds correlates with positive abnormal stock returns and negative CDS spread changes in the immediate post-announcement period. The effects are most pronounced for first-time issues. We explain the CDS spread changes by the lower probability of costly bankruptcy proceedings and the abnormal stock returns by a signaling framework that is based on pecking order theory and the cost advantage over equity (tax shield). We also examine the factors that are associated with the post-announcement abnormal stock returns and find that the existence of issuer call provisions reduces the positive abnormal returns.

Status: Published in European Financial Management (EFM); older version available on SSRN