kaal:claim:2273857-058

Managers are incentivized to manage their institutions so as to avoid contingent capital triggers, and that incentive itself can optimize the governance of financial institutions.

Source quote, verbatim

Managers are incentivized to manage their respective entities to avoid CoCo triggers, which can help optimize governance of financial institutions.

From

Wulf A. Kaal, Dynamic Regulation of the Financial Services Industry (2013), IV. Implementation, p. 28
https://ssrn.com/abstract=2273857 · source PDF

Cite as

Wulf A. Kaal, Dynamic Regulation of the Financial Services Industry (2013). SSRN: https://ssrn.com/abstract=2273857

Holds when

CoCos are outstanding with credible trigger terms

Classification

mechanismsupport: arguedcontingent-capitalrisk-and-incentivesgovernance-designcorporate-governancedynamic-regulation

Related claims

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extends kaal:claim:1998455-040 Contingent capital can facilitate an incentive structure that lets regulators rely partially on private party ...

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