# kaal:claim:2957645-027

**Claim.** Contingent capital creates feedback effects because the conversion of debt to equity signals to regulators that the entity's management was unable to avoid the trigger, which is itself a call for increased regulatory scrutiny.

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

**Holds when.**

- regulators observe conversion events

**Source quote.**

> Second, contingent capital creates feedback effects because the conversion of debt to equity signals to regulators that the respective entity's management that was unable to avoid the trigger from debt to equity, which calls for increased regulatory scrutiny.57

**From.** Kaal, *Dynamic Regulation via Contingent Capital* (2017), IV. Dynamic Regulation Via Contingent Capital, page 15

**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.** institutional-design, contingent-capital

**Keywords.** feedback-effects, contingent-capital, regulatory-scrutiny, signaling

**Related claims.**

- restates: https://wulfkaal.github.io/claims/2273857-059

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