Cluster-robust standard errors are in parentheses. ***p < 0.01, **p < 0.05, *p < 0.1.

This table provides the results of a panel regression with bank and time fixed effects checking the impact of the loss absorption mechanisms of CoCos on banks risk-taking during 2011–2018. The dependent variables are loan loss reserves to gross loans (Columns 1–3) and Impaired loans to gross loans (Columns 2–4). The variables of interest are PWD (write-down CoCos), a dummy which is equal 1 when the issuance is a write-down CoCo and 0 otherwise and CE (conversion-to-equity CoCos), a dummy which is equal 1 when the CoCo is issued as conversion-to-equity and 0 otherwise. Controls variables are the natural logarithm of bank total assets, the proportion of bank net loans to total assets, total customer deposits to total assets, the net interest margin (NIM) and total equity to total assets. All variables are winsorized at the 1st and 99th percentile