kaal:claim:2061166-031

A trigger that fires too early wastes the equity injection: conversion occurs without a real need for capital or additional voting shareholders, and the effect of the injection may have dissipated by the time it is actually needed.

If conversion is triggered too early without a real need for an equity capital injection (and additional voting shareholders), the impact of the equity capital injection may have dissipated and may no longer be available when actually needed.

Christoph K. Henkel, Wulf A. Kaal, Contingent Capital in European Union Bank Restructuring (2012), B. Timing Trigger Events, p. 66
https://ssrn.com/abstract=2061166 · source PDF

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

• contingent capital converting on a trigger set too far from distress

failuresupport: arguedfailure: Premature conversion dissipates the capital injectionfamily: trigger-design-failurecontingent-capital

• restates kaal:claim:1908473-003 If conversion of contingent capital securities is triggered too early, before a real financial need for an equ...
• restates kaal:claim:1998455-012 Converting contingent capital securities prematurely, while the institution can still operate without an equit...

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