# kaal:claim:2273857-060

**Claim.** Contingent capital triggers have significant design limitations: accounting based triggers may not respond adequately in financial crises because they are updated too infrequently, while market based triggers are susceptible to market manipulation and bank runs.

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

**Holds when.**

- accounting based institution specific triggers
- market based institution specific triggers

**Source quote.**

> accounting-based measures in institution-specific automatic triggers may not be able to respond adequately in financial crises because they are arguably too infrequently updated. Market-based measures, on the other hand, could be susceptible to market manipulation and banking runs.

**From.** Wulf A. Kaal, *Dynamic Regulation of the Financial Services Industry* (2013), IV. Implementation (footnote 127), page 28

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

**Verify.** sha256 of source PDF `e7cb3dea40593135acc99a9b00690138fe01020514ebf388f5140e1b0e59e82a` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202013%20-%20Dynamic%20Regulation%20of%20the%20Financial%20Services%20Industry.pdf

**Failure mode.** CoCo trigger design failure  (family: trigger-design-failure)

**Topics.** contingent-capital, economics, regulatory-failure

**Keywords.** contingent-capital, trigger-design, market-manipulation, regulatory-failure

**Related claims.**

- restates: https://wulfkaal.github.io/claims/2097160-016
- supersedes: https://wulfkaal.github.io/claims/1908473-008

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.