# kaal:claim:2061166-032

**Claim.** 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.

**Type.** failure  **Support.** argued

**Holds when.**

- contingent capital converting only at or near the point of non-viability

**Source quote.**

> 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.

**From.** Christoph K. Henkel, Wulf A. Kaal, *Contingent Capital in European Union Bank Restructuring* (2012), B. Timing Trigger Events, page 66

**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

**Failure mode.** Late conversion cannot recapitalize a firm already in resolution  (family: trigger-design-failure)

**Topics.** contingent-capital, systemic-risk

**Keywords.** trigger-timing, conversion, resolution, contingent-capital, design-failure

**Related claims.**

- restates: https://wulfkaal.github.io/claims/1908473-004
- restates: https://wulfkaal.github.io/claims/1998455-013

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