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Contingent Capital With Sequential Triggers, Wulf A. Kaal, Christoph K. Henkel

San Diego Law Review

Contingent capital has great potential to help make systemically important financial institutions (SIFIs) safer, minimize systemic risk, and help avoid another financial crisis. United States policymakers may not have fully utilized the potential of contingent capital. A draft by the European Union (EU) Commission already suggests the mandatory issuance of contingent capital securities in the resolution phase of systemically important banks in Europe. The Dodd-Frank Wall Street Reform and Consumer Protection Act mandates a study on the feasibility of contingent capital. This Article proposes the use of contingent capital with a sequential trigger as an early preventative tool and as …