kaal:claim:2061166-032

A trigger that fires too late is equally useless: by then the financial institution may already be in the resolution stage, and conversion at that point will not supply enough equity to turn the company around.

If conversion from debt to equity is triggered too late, the financial institution may already be in the resolution stage and conversion at that stage would not supply the company with sufficient equity to turn the company around.

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 only at or near the point of non-viability

failuresupport: arguedfailure: Late conversion cannot recapitalize a firm already in resolutionfamily: trigger-design-failurecontingent-capitalsystemic-risk

• restates kaal:claim:1908473-004 If conversion from debt to equity is triggered too late, the institution may already be in the resolution stag...
• restates kaal:claim:1998455-013 Converting contingent capital securities too late makes the capital injection superfluous, because by that sta...

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