# kaal:claim:1998455-031

**Claim.** Issuing contingent capital securities with a conversion feature is a way for a banking entity to signal to its market that it will adhere to stricter standards, ethical or otherwise.

**Type.** design  **Support.** argued

**Holds when.**

- where the market can observe and interpret the issuance as a commitment
- the author notes the signaling effect of any particular issuance is difficult to ascertain

**Source quote.**

> The issuance of contingent capital securities with a conver- sion feature could signal adherence to stricter standards.

**From.** Wulf A. Kaal, *Initial Reflections on the Possible Application of Contingent Capital in Corporate Governance* (2012), VII.B. Reform from Within, page 44

**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

**Keywords.** signaling, contingent-capital, reform-from-within, business-ethics, credit-suisse

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