After the last financial crisis, a new form of hybrid capital - contingent convertible bonds (CoCo bonds) - occured. Generally, issuances of these instruments with a very complex structure are favoured by regulators as a tool for shifting the costs for banks' rescues from taxpayers to debtholders. However, the effect of CoCo bonds on financial stability are uncertain. The core part of my dissertation (Chapter 1) aims at comparing the effective default risk relief after a CoCo bond is suance announcement with the effect of common equity. Furthermore, the results show no increase in risk-shifting incentives with more CoCo bonds in banks' capital structure. In Chapter 2, I look at equity returns and default risk prior to CoCo bonds and common equity issuance announcements. Chapter 3 is devoted to the characteristics of CoCo bonds issued by Chinese banks. Especially the results of Chapter 1 are of a great importance for regulators.