kaal:claim:1998455-017

Contingent capital rules could contribute to overriding the moral reasoning of decision makers, in which case contingent capital would actually increase, not reduce, risk incentives for institutions that are too big to fail.

This could mean that contingent capital rules could actually contribute to overriding decision maker's moral reasoning. In that case, contingent capital could actually increase risk incentives for SI- FIs that are too big to fail.

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

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

• where decision makers operate under an illusion of heightened protection
• where the underlying contingent capital design is flawed

failuresupport: arguedfailure: moral-reasoning-crowd-outfamily: moral-hazard-and-bailout-expectationcontingent-capitalrisk-and-incentivessystemic-risk

• extends kaal:claim:1908473-015 Switching to contingent capital financing may reinforce rather than reduce risk incentives, and whether the ri...

The quote above is an exact substring of the source PDF, whose sha256 is 1c16ff10a284469ba15fb7ba5523449b917388ee692d9b394f9e8c094544e32c. Extraction method: pdf-text-layer.
Attestation record: colloquium/attestations/27d4df04699edfd1...json
Verify the binding yourself: curl -s https://wulfkaal.github.io/claims/1998455-017.md | sha256sum