Goodhart: CoCos 'not silver bullets' for bank capital reform
Regulators should ban dividend payments or curb banker pay to conserve cash, instead of championing Cocos, says economist
Regulatory enthusiasm for contingent convertibles – or CoCos – fails to appreciate serious weaknesses in the bonds and the effect triggering CoCos would have on their market value, according to Charles Goodhart, a professor at the London School of Economics (LSE) and former member of the Bank of England's Monetary Policy Committee. Instead, he argues regulators should be willing to step in and compel banks to conserve cash in other ways as distress grows – by preventing dividend payments, for
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