# kaal:claim:1428387-029

**Claim.** Limiting the use of hard-to-value assets and complex financial products is very unlikely to have positive effects, because the implicit inhibition of financial innovation would probably limit investors' use of hedging products and interfere with economic expansion.

**Type.** failure  **Support.** argued

**Holds when.**

- where regulators respond to systemic risk by restricting instrument use

**Source quote.**

> assets. It is very unlikely that limiting the use of financial instruments will have positive effects. The implicit inhibition of financial innovation would probably limit investors' use of hedging products and interfere with economic expansion.232

**From.** Kaal, *Hedge Fund Valuation Retailization, Regulation, and Investor Suitability* (2009), VI.A Limitation on the Use of Hard-to-Value Assets and Financial Products, page 48

**Cite as.** Kaal, Hedge Fund Valuation Retailization, Regulation, and Investor Suitability (2009). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1428387

**Verify.** sha256 of source PDF `6aa3a280dc6750723be2389f3af2aabf3a16c4ce20e49fcdaddd7f2ea95a67aa` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202009%20-%20Hedge%20Fund%20Valuation%20Retailization%2C%20Regulation%2C%20and%20Investor%20Suitability.pdf

**Failure mode.** innovation-inhibition  (family: innovation-chilling)

**Topics.** innovation

**Keywords.** financial-innovation, hedging, regulatory-options, unintended-consequences

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