kaal:claim:2061166-033

Dual trigger proposals draw their central strength from reliance on market prices, but the index leg is a major disadvantage because it can create incentives to manipulate the index or to force an entity into bankruptcy before conversion occurs.

A central strength of the dual trigger proposals is their reliance on market prices. A major disadvantage is the index trigger, which could potentially create incentives to manipulate the index or to try to force an entity into bankruptcy.

Christoph K. Henkel, Wulf A. Kaal, Contingent Capital in European Union Bank Restructuring (2012), C. Dual Triggers in Going and Gone Concern, p. 67
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

• dual trigger designs combining a firm stock price trigger with a financial institutions index trigger

failuresupport: arguedfailure: Index trigger invites manipulation and forced bankruptcyfamily: trigger-design-failurecontingent-capitaleconomics

• restates kaal:claim:1908473-023 A dual trigger that relies on a financial institution index gains from its use of market prices but is vulnera...

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