# kaal:claim:1806252-015

**Claim.** An institution or a country creates externalities when it manages its own hedge fund generated systemic risk without considering how its actions or inactions affect risk in the system as a whole.

**Type.** definitional  **Support.** asserted

**Source quote.**

> An institution or country creates externalities if it manages its own hedge fund-generated systemic risk without considering the impact of its actions or inactions on the risk in the system as a whole.

**From.** Kaal, *Hedge Fund Regulation Via Basel III* (2011), V.2 Systemic Risk and Externalities, page 64

**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.** systemic-risk, risk-and-incentives, institutional-design

**Keywords.** externalities, systemic-risk, definitions, regulatory-coordination

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