# kaal:claim:1998455-016

**Claim.** 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.

**Type.** failure  **Support.** speculative

**Holds when.**

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

**Source quote.**

> 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, page 33

**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.** monitoring-neglect-through-reliance-on-design  (family: moral-hazard-and-bailout-expectation)

**Topics.** contingent-capital, compliance, consensus-and-security, governance-design, corporate-governance

**Keywords.** contingent-capital, monitoring, false-security, corporate-governance, failure-modes

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