Contingent capital enables anticipatory regulation because regulators may observe and react in real time to triggering events, before the regulated entities encounter financial calamity.
Source quote, verbatim
Finally, contingent capital enables anticipatory regulation because regulators may observe and react in real time to triggering events, before entities encounter financial calamity.
Kaal, Dynamic Regulation via Contingent Capital (2017). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2957645
Holds when
triggering events occur before, not after, financial distress becomes terminal
Classification
mechanismsupport: arguedcontingent-capital
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