Initial Reflections on the Possible Application of Contingent Capital in Corporate Governance
Wulf A. Kaal · 2012
The failure of systemically important financial institutions (SIFIs) during the 2008–2009 financial crisis may underscore possible shortcom- ings in corporate governance. The regulatory evaluation of contingent capital in the United States could be an opportunity to assess the possible application of contingent capital in the corporate governance of SIFIs. While regulatory initiatives in Europe and the academic debate in the United States are dominated by efforts to improve the technical design fea- tures of contingent capital securities, this Article suggests that contingent capital designs in various jurisdictions could benefit from experimentation and a learning experience that takes corporate governance applications into account. As the design features evolve and their scope and impact be- come clearer, possible corporate governance improvements could become more obvious. ∗ Associate Professor, University of Saint Thomas School of Law (Minneapolis). The author wishes to acknowledge the assistance of his col- leagues Richard Painter, Lyman Johnson, and Neil Hamilton. The author is also grateful for outstanding research assistance from Ms. Vanessa Maria Cruz. 101 102 NOTRE DAME JOURNAL OF LAW, ETHICS & PUBLIC POLICY [Vol. 26
Cite: Wulf A. Kaal, Initial Reflections on the Possible Application of Contingent Capital in Corporate Governance (2012). SSRN: https://ssrn.com/abstract=1998455
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