# kaal:claim:2097160-014

**Claim.** Regulatory triggers generate the highest level of uncertainty and can produce ad hoc regulatory decisions and adverse market responses, so they are not the best option for contingent convertible bonds in executive compensation.

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

**Holds when.**

- triggers left to regulatory discretion

**Source quote.**

> Regulatory triggers may lead to market uncertainty and ad hoc decisions by regulators and result in adverse market responses. Because regulatory triggers generate the highest level of uncertainty,152 they may not be the best option

**From.** Wulf A. Kaal, *Contingent Capital in Executive Compensation* (2012), V.B.1 Automatic Institution-Specific Early Trigger, page 36

**Cite as.** Wulf A. Kaal, Contingent Capital in Executive Compensation (2012). SSRN: https://ssrn.com/abstract=2097160

**Verify.** sha256 of source PDF `1e1f8aa246bce19f4658dbceb455c7c2a272aa5d63a9e9bdaa46a3a5a87680fc` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202012%20-%20Contingent%20Capital%20in%20Executive%20Compensation.pdf

**Failure mode.** Regulatory discretion trigger uncertainty  (family: trigger-design-failure)

**Topics.** contingent-capital, economics

**Keywords.** regulatory-trigger, market-uncertainty, trigger-design, regulatory-discretion

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