# kaal:claim:2061166-030

**Claim.** 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.

**Type.** mechanism  **Support.** speculative

**Holds when.**

- the interplay of trigger structure, uncertainty and market development has not been systematically studied

**Source quote.**

> 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, page 65

**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

**Topics.** contingent-capital

**Keywords.** trigger-design, uncertainty, issuance-volume, pricing, contingent-capital

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