Basel III - Implications for banks` capital structure: What happens with hybrid capital instruments?

This book attempts to answer the question of how CoCos differ from convertible bonds, and how these instruments are suitable for contributing as core capital under Basel III. The place ability of CoCos and the challenges resulting from their use are discussed in this book. Overall a comprehensive picture of the impacts resulting from the new capital definitions will be created. The Background to the introduction of Basel III is described at the beginning of the book, in addition to a presentation of the Basel III document and the new capital definitions. To create a kind of basic understanding of the functioning of convertible bonds and CoCos, hybrid capital will then be explained. In the following part of the book the design options of CoCos and different interests of investor groups are shown. Then the Commerzbank AG is analyzed by means of an analysis of how the capital components changed in Basel II through to Basel III over the last two years. The effect of Basel III on hybrid capital will be illustrated with a practical example. At the end of the book follows a short conclusion regarding the potential impact of Basel III on hybrid capital and the new capital instrument CoCos.

Autorentext

Timo Köffer was born in 1990 in Kamp-Lintfort (Germany). After he had successfully completed his training as a banker clerk, he worked at various job positions in a large German bank. In addition, he successfully completed an evening study course in business administration. The actually regulatory changes in the banking market, motivated him to wrote this book.