# kaal:claim:2097160-023

**Claim.** Existing default risk signals were inadequate: CAMEL ratings and credit default swap pricing did not suffice to signal default risk at Lehman Brothers, Bear Stearns, or Merrill Lynch.

**Type.** failure  **Support.** asserted

**Holds when.**

- the 2008 to 2009 financial crisis

**Source quote.**

> CAMEL ratings and credit default swap pricing did not suffice to signal default risk in the cases of Lehman Brothers, Bear Stearns, and Merrill Lynch.

**From.** Wulf A. Kaal, *Contingent Capital in Executive Compensation* (2012), V.B.2 The Benefits of Early Triggers, footnote 182, page 44

**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.** Existing default risk signals failed in the crisis  (family: measurement-and-metric-failure)

**Topics.** risk-and-incentives

**Keywords.** camel-ratings, credit-default-swaps, default-risk, signaling-failure

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