Published:
03/09/2010
Attachments:
FHFA Working Paper 10-2
Author(s): Robert N. Collender, Senior Policy Analyst, Forrest W. Pafenberg, Senior Policy Analyst, and Robert S. Seiler, Jr., Manager for Policy Research
Abstract: Regulators are seeking ways to reduce the procyclical effect of the current capital regulatory regime and the spillovers associated with financial firm distress. This paper examines one set of proposed solutions: ex post mechanisms that would automatically recapitalize systemically important financial institutions during periods of distress. Such mechanisms include contingent capital notes (CCNs) and capital insurance.