entity · derived

Failure modes

12 claims across 2 works, 2012–2023.

Derived node: assembled mechanically from the claims carrying failure-modes. A roster, not an adjudicated definition.

Every claim under this term

• 1998455-012 2012 failure: Converting contingent capital securities prematurely, while the institution can still operate without an equity injection, dissipates the benefit: the injection is no longer available at the later mom
• 1998455-013 2012 failure: Converting contingent capital securities too late makes the capital injection superfluous, because by that stage the institution may face unresolvable difficulties that a capital injection can only ma
• 1998455-014 2012 failure: Contingent capital by itself, without additional measures and supplemental corporate governance improvements, may not prevent firm failure; its real potential unfolds only when it supplements other co
• 1998455-016 2012 failure: If a market evolves in which contingent capital designs appear to provide sufficient protection against systemic risk and contagion, decision makers may come to rely on the design of those securities
• 1998455-017 2012 failure: Contingent capital rules could contribute to overriding the moral reasoning of decision makers, in which case contingent capital would actually increase, not reduce, risk incentives for institutions t
• 1998455-018 2012 failure: Regular corporate governance controls may not work in systemically important financial institutions, because those institutions are considered too big to fail and their leaders, anticipating a bailout
• 1998455-019 2012 failure: Switching to contingent capital financing could reinforce rather than dampen risk incentives, and these distorted risk incentives are a drawback of contingent capital issuances.
• 1998455-029 2012 failure: The social welfare maximization potential of contingent capital securities is lower if their design features are left entirely to private ordering, because private parties do not necessarily structure
• 1998455-036 2012 failure: If central banks were to purchase contingent capital securities issued by systemically important institutions in the primary or secondary market as part of monetary policy, the prospect of internalizi
• 1998455-037 2012 failure: Combining the existing prioritization of bailouts for systemically important institutions with central bank purchases of their contingent capital in a given jurisdiction would further incentivize thos
• 1998455-039 2012 failure: An outright retroactive charge for government subsidies or for actions taken by regulators could backfire, because it would legitimize the bailout and perpetuate its socially suboptimal consequences.
• 4529715-014 2023 failure: Some DAO governance platforms create more risk than they mitigate, and DAOs that are not well governed are doomed to fail.

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