# kaal:claim:1998455-008

**Claim.** 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.

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

**Holds when.**

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

**Source quote.**

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

**From.** Wulf A. Kaal, *Initial Reflections on the Possible Application of Contingent Capital in Corporate Governance* (2012), III.A. Possible Applications, page 19

**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

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

**Keywords.** contingent-capital, moral-hazard, cost-internalization, bank-failure

**Related claims.**

- extended_by: https://wulfkaal.github.io/claims/2957645-007
- extended_by: https://wulfkaal.github.io/claims/2957645-021
- restated_by: https://wulfkaal.github.io/claims/2061166-021
- restates: https://wulfkaal.github.io/claims/1908473-016

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