kaal:claim:1998455-016

If a market evolves in which contingent capital designs appear to provide sufficient protection against systemic risk and contagion, decision makers may come to rely on the design of those securities and neglect their own role as monitors.

Source quote, verbatim

it seems theoretically possible that decision makers could rely on the design of CCS and neglect their role as monitors.

From

Wulf A. Kaal, Initial Reflections on the Possible Application of Contingent Capital in Corporate Governance (2012), IV.A. Adverse Effects, p. 33
https://ssrn.com/abstract=1998455 · source PDF

Cite as

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

Holds when

theoretical possibility flagged by the author
presupposes CCS designs that appear protective

Classification

failuresupport: speculativefailure: monitoring-neglect-through-reliance-on-designfamily: moral-hazard-and-bailout-expectationcontingent-capitalcomplianceconsensus-and-securitygovernance-designcorporate-governance

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