# kaal:claim:2061166-033

**Claim.** 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.

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

**Holds when.**

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

**Source quote.**

> 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.

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

**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.** Index trigger invites manipulation and forced bankruptcy  (family: trigger-design-failure)

**Topics.** contingent-capital, economics

**Keywords.** dual-trigger, market-manipulation, index-trigger, contingent-capital, trigger-design

**Related claims.**

- restates: https://wulfkaal.github.io/claims/1908473-023

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