# kaal:claim:2957645-022

**Claim.** The threat of dilution of stock holdings, combined with the threat of loss upon conversion, could help reduce the pressure shareholders place on management of systemically important financial institutions to take increasing risks.

**Type.** mechanism  **Support.** argued

**Holds when.**

- conversion dilutes existing common shareholders
- shareholders anticipate the dilution ex ante

**Source quote.**

> The threat of dilution of stock holdings, in combination with a threat of loss due to conversion could help reduce shareholder pressure on SIFI management to take increasing risks.48

**From.** Kaal, *Dynamic Regulation via Contingent Capital* (2017), III. Contingent Capital, page 13

**Cite as.** Kaal, Dynamic Regulation via Contingent Capital (2017). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2957645

**Verify.** sha256 of source PDF `250b10782a5ea5dece9235a7f711aee408feaf36f2e78e310d589b5ee6304be2` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202017%20-%20Dynamic%20Regulation%20via%20Contingent%20Capital.pdf

**Topics.** corporate-governance, risk-and-incentives, systemic-risk, contingent-capital, governance-design

**Keywords.** shareholder-dilution, risk-taking, sifi, contingent-capital, corporate-governance

**Related claims.**

- restates: https://wulfkaal.github.io/claims/1998455-010
- restates: https://wulfkaal.github.io/claims/1908473-018
- restates: https://wulfkaal.github.io/claims/2061166-022
- extends: https://wulfkaal.github.io/claims/1908473-014

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