kaal:claim:1998455-037

Combining the existing prioritization of bailouts for systemically important institutions with central bank purchases of their contingent capital in a given jurisdiction would further incentivize those institutions to adopt similar risk profiles and correlate their risks.

Source quote, verbatim

Combining bailout prioritization with central bank CCS purchases in a given jurisdiction could further incentivize SIFIs to adopt similar risk profiles and corre- late risks.

From

Wulf A. Kaal, Initial Reflections on the Possible Application of Contingent Capital in Corporate Governance (2012), VII.D. Additional Considerations, p. 49
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

in a jurisdiction where both bailout prioritization and central bank CCS purchases occur

Classification

failuresupport: arguedfailure: correlated-risk-from-central-bank-purchasesfamily: systemic-risk-transmissionsystemic-riskrisk-and-incentives

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