# kaal:claim:1806252-011

**Claim.** Banks' lending practices and counterparty credit risk management can curtail hedge funds' excessive risk taking because banks can use the threat of cutting off future lending to change a fund's behavior.

**Type.** mechanism  **Support.** argued

**Holds when.**

- the bank has an ongoing lending relationship with the fund

**Source quote.**

> counterparty credit risk management (CCRM) may allow them to curtail excessive risk taking, because they are in a position to use the threat of cutting off future lending to improve a hedge fund's behavior.

**From.** Kaal, *Hedge Fund Regulation Via Basel III* (2011), V. AN ALTERNATIVE APPROACH TO HEDGE FUND REGULATION, page 62

**Cite as.** Kaal, Hedge Fund Regulation Via Basel III (2011). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1806252

**Verify.** sha256 of source PDF `3343ebfe05a925c3d1a75625c4b351ccff515c50819a48d155804daacf01429d` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202011%20-%20Hedge%20Fund%20Regulation%20Via%20Basel%20III.pdf

**Topics.** risk-and-incentives, systemic-risk, compliance

**Keywords.** counterparty-credit-risk, indirect-regulation, bank-monitoring, moral-hazard

**Related claims.**

- extended_by: https://wulfkaal.github.io/claims/2714974-031
- supported_by: https://wulfkaal.github.io/claims/2748096-007
- extended_by: https://wulfkaal.github.io/claims/2714974-032

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.