Building critical mass in the contingent capital securities market could require banks and other financial institutions to buy their competitors' contingent capital securities, which would raise ethical, antitrust and incentive concerns.
Source quote, verbatim
Developing a critical mass for the market in contingent capital securities could require banks and other financial institutions to purchase their competitors' contingent capital securities.533 That could raise ethical, antitrust, and incentive concerns.
From
Christoph K. Henkel, Wulf A. Kaal, Contingent Capital in European Union Bank Restructuring (2012), A. Trigger Events, Uncertainty, Market Development, p. 65 https://ssrn.com/abstract=2061166 · source PDF
Cite as
Christoph K. Henkel, Wulf A. Kaal, Contingent Capital in European Union Bank Restructuring (2012). SSRN: https://ssrn.com/abstract=2061166
Holds when
where non-bank demand is insufficient to absorb issuance volumes
Classification
failuresupport: arguedfailure: Cross-holding of contingent capital among competitorsfamily: systemic-risk-transmissioncontingent-capitalreputationeconomicssystemic-riskrisk-and-incentives
Related claims
extendskaal:claim:1998455-020 A mandatory contingent capital issuance regime induces institutions to buy their competitors' securities to sa...
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