# kaal:claim:2061166-016

**Claim.** The supervisor's discretion to set a deadline for a recovery plan before issuing a transfer order is unlikely ever to be exercised in practice, because in a crisis time will be of the essence to prevent contagion.

**Type.** failure  **Support.** argued

**Holds when.**

- asset transfer to a bridge bank under the German Banking Act
- crisis conditions with contagion risk

**Source quote.**

> Considering the turmoil of the financial crisis, it is doubtful that the Authority will ever have the privilege to exercise this discretion as time will be of the essence to prevent contagion.

**From.** Christoph K. Henkel, Wulf A. Kaal, *Contingent Capital in European Union Bank Restructuring* (2012), (b) Regulatory intervention powers and procedures, page 47

**Cite as.** Christoph K. Henkel, Wulf A. Kaal, Contingent Capital in European Union Bank Restructuring (2012). SSRN: https://ssrn.com/abstract=2061166

**Verify.** sha256 of source PDF `43625ea260d0fc045e86d3435df50c9d0ca4abf8542e6085a6165be6653b4a7b` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Henkel%20and%20Kaal%20-%202012%20-%20Contingent%20Capital%20in%20European%20Union%20Bank%20Restructuring.pdf

**Failure mode.** Recovery-plan deadline unusable under time pressure  (family: supervisory-capacity-gap)

**Topics.** systemic-risk

**Keywords.** german-banking-law, bridge-bank, recovery-plan, contagion, supervisory-discretion

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