kaal:claim:1908473-004

If conversion from debt to equity is triggered too late, the institution may already be in the resolution stage, and conversion at that point may not supply enough equity to produce the intended financial improvement.

On the other hand, if conversion from debt to equity is triggered too late, the financial institution may already be in the resolution stage, and conversion at that stage may not supply the company with sufficient equity to facilitate the desired financial improvement.

Wulf A. Kaal, Christoph Henkel, Contingent Capital with Sequential Triggers (2011), I. INTRODUCTION, p. 11
https://ssrn.com/abstract=1908473 · source PDF

Wulf A. Kaal, Christoph Henkel, Contingent Capital with Sequential Triggers (2011). SSRN: https://ssrn.com/abstract=1908473

• Institution has already entered the resolution stage when conversion occurs

failuresupport: arguedfailure: late-trigger-insufficiencyfamily: trigger-design-failurecontingent-capitalsystemic-risk

• restated_by kaal:claim:2061166-032 A trigger that fires too late is equally useless: by then the financial institution may already be in the reso...
• restated_by kaal:claim:1998455-013 Converting contingent capital securities too late makes the capital injection superfluous, because by that sta...
• extended_by kaal:claim:2061166-035 Conversion of contingent capital securities from debt to equity should be timed to occur once problems are fir...

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