kaal:claim:1908473-008

The first trigger should be based on a threshold in market value rather than accounting measures, because a market value trigger avoids total reliance on accounting methods that are open to manipulation.

A later claim in the corpus revises this one. Prefer quoting kaal:claim:2273857-060.

Source quote, verbatim

The core argument for this design feature is that it helps avoid total reliance on accounting methods that could otherwise be subject to manipulation.

From

Wulf A. Kaal, Christoph Henkel, Contingent Capital with Sequential Triggers (2011), I. INTRODUCTION, p. 13
https://ssrn.com/abstract=1908473 · source PDF

Cite as

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

Holds when

The authors decline to take a general position in the first trigger debate

Classification

designsupport: arguedcontingent-capitaleconomics

Related claims

contested_by kaal:claim:2097160-016 Market-based trigger measures are vulnerable to market manipulation and bank runs, while accounting-based meas...

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