Date & Time: June 7, 2018 13:30 p.m. -15:00 p.m.
Venue: SEM 320 Meeting Room
Inviter: Ming Guo
Abstract：
Contingent convertible bonds (CoCos) are the latest capital instruments advocated by regulators including the Basel Committee on Banking Supervision. CoCos are designed to reduce banks’ dependence on external support—especially government bailouts— and have been extensively issued by banks worldwide since the 2008 financial crisis. Analyzing a comprehensive dataset, we find that banks distributing more dividends out of earnings issue more CoCos. This result is more pronounced when bank shareholders have a stronger preference for dividends. CoCo issuance is not related to regulatory capital ratios for banks that have low dividend payout ratios. Moreover, banks increase dividend payout after CoCo issuance. Our findings are in sharp contrast with existing theories and policy debates on CoCo issuance, which ignore dividend payouts. The results of this study suggest that bank shareholder interest, rather than improving bank resilience or curbing negative spillovers as intended, is the primary consideration for CoCo issuance.
Speaker Biography：
Chenyu Shan is a Assistant Professor of Finance at Shanghai University of Finance and Economics (SUFE). Susan obtained her Ph.D. in Finance at the University of Hong Kong in 2013. She was a Fulbright visiting scholar at Wharton School, University of Pennsylvania 2011-2012. Chenyu’s research mainly focuses on areas of credit default swaps, credit market, corporate finance, and banking. Her papers were selected into major conferences including Western Finance Association (WFA), European Finance Association (EFA), Financial Intermediation Research Society (FIRS), SFS Cavalcade, China International Conference in Finance (CICF), among others. She received many honors and awards, including the FGV/HSG Best Paper Award in Finance in 2016, the Best Paper Award from the 2014 Conference on Financial Markets and Corporate Governance, the Best Paper Award from the Chinese Finance Association (TCFA) in 2011, the 2012 AFA Travel Grant, and Beta Gamma Sigma in 2013. Chenyu won the Fulbright Fellowship Sponsored by U.S. Department of State in 2011.
