The authors posit an inverse relationship between trigger uncertainty and market development: as the uncertainty generated by trigger designs increases, issuance volume of contingent capital securities falls, while the risk and the pre-conversion interest rate on those securities rises.
Source quote, verbatim
Line 1 shows that, as the uncertainty generated by the trigger designs increases, the volume of CCS could decrease. Line 2 suggests that risk and the interest rates of CCS (before conversion) will increase with the level of uncertainty in the trigger design
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
the interplay of trigger structure, uncertainty and market development has not been systematically studied
Classification
mechanismsupport: speculativecontingent-capital
Verify
The quote above is an exact substring of the source PDF, whose sha256 is 43625ea260d0fc045e86d3435df50c9d0ca4abf8542e6085a6165be6653b4a7b. Extraction method: pdf-text-layer. Attestation record: colloquium/attestations/4cfd95b93104d833...json Verify the binding yourself: curl -s https://wulfkaal.github.io/claims/2061166-030.md | sha256sum