# kaal:claim:1998455-001

**Claim.** Government bailouts of systemically important financial institutions create strong incentives for those institutions to externalize the cost of their risk taking onto taxpayers.

**Type.** mechanism  **Support.** argued

**Holds when.**

- where governments provide bailout funding to systemically important financial institutions

**Source quote.**

> Government bailouts create strong incentives to externalize the cost of SIFIs' risk taking onto taxpayers.

**From.** Wulf A. Kaal, *Initial Reflections on the Possible Application of Contingent Capital in Corporate Governance* (2012), I. Introduction, page 4

**Cite as.** Wulf A. Kaal, Initial Reflections on the Possible Application of Contingent Capital in Corporate Governance (2012). SSRN: https://ssrn.com/abstract=1998455

**Verify.** sha256 of source PDF `1c16ff10a284469ba15fb7ba5523449b917388ee692d9b394f9e8c094544e32c` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202012%20-%20Initial%20Reflections%20on%20the%20Possible%20Application%20of%20Contingent%20Capital%20in%20Corporate%20Governance.pdf

**Failure mode.** bailout-cost-externalization  (family: moral-hazard-and-bailout-expectation)

**Topics.** systemic-risk, risk-and-incentives

**Keywords.** bailouts, moral-hazard, systemic-risk, sifis, externalities

**Related claims.**

- extends: https://wulfkaal.github.io/claims/1806252-013

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.