kaal:claim:1998455-008

Contingent capital contributes to minimizing moral hazard by internalizing bank failure costs, that is, by placing those costs on the institution's own security holders rather than on the public.

By inter- nalizing bank failure costs, contingent capital could contribute to minimizing moral hazard.

Wulf A. Kaal, Initial Reflections on the Possible Application of Contingent Capital in Corporate Governance (2012), III.A. Possible Applications, p. 19
https://ssrn.com/abstract=1998455 · source PDF

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

• where the conversion feature actually shifts failure costs to CCS holders and shareholders

mechanismsupport: arguedcontingent-capitalrisk-and-incentivessystemic-risk

• extended_by kaal:claim:2957645-007 By internalizing the costs of bank failure, contingent capital may be able to minimize moral hazard, avoid fin...
• extended_by kaal:claim:2957645-021 Appropriate use of contingent capital triggers can further lower the default risk of the contingent capital se...
• restated_by kaal:claim:2061166-021 Contingent capital supports general risk control and reduces moral hazard by holding shareholders responsible ...
• restates kaal:claim:1908473-016 By internalizing the costs of bank failure, contingent capital can reduce moral hazard, and because a continge...

The quote above is an exact substring of the source PDF, whose sha256 is 1c16ff10a284469ba15fb7ba5523449b917388ee692d9b394f9e8c094544e32c. Extraction method: pdf-text-layer.
Attestation record: colloquium/attestations/f9dcf5af2d02d121...json
Verify the binding yourself: curl -s https://wulfkaal.github.io/claims/1998455-008.md | sha256sum