# kaal:claim:1998455-013

**Claim.** Converting contingent capital securities too late makes the capital injection superfluous, because by that stage the institution may face unresolvable difficulties that a capital injection can only marginally soften, and conversion may not suffice once the institution has entered resolution.

**Type.** failure  **Support.** argued

**Holds when.**

- where the trigger fires after the institution's difficulties have become unresolvable
- especially once the institution has entered the resolution stage

**Source quote.**

> On the other hand, converting CCS too late could make the capital injection superfluous. At that stage, the financial institu- tion may have experienced unresolvable financial difficulties that may only marginally be softened with a capital injection.

**From.** Wulf A. Kaal, *Initial Reflections on the Possible Application of Contingent Capital in Corporate Governance* (2012), III.B. Unresolved Design Issues, page 23

**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.** late-conversion  (family: trigger-design-failure)

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

**Keywords.** trigger-design, late-conversion, contingent-capital, resolution, failure-modes

**Related claims.**

- extends: https://wulfkaal.github.io/claims/1908473-003
- restated_by: https://wulfkaal.github.io/claims/2061166-032
- restates: https://wulfkaal.github.io/claims/1908473-004
- extended_by: https://wulfkaal.github.io/claims/2061166-034

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