kaal:claim:1806252-028

A standard objection to indirect regulation is that counterparty credit risk management will not work effectively unless the lending bank has an exclusive relationship with the hedge fund that lets it control the relationship.

CCRM will not work effectively unless the bank has an exclusive relationship with the hedge fund that allows it to control the relationship.

Kaal, Hedge Fund Regulation Via Basel III (2011), V.4 Hedge Fund Regulation via Basel III, p. 71
https://ssrn.com/abstract=1806252 · source PDF

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

• a hedge fund borrows from more than one bank, so no single bank sees its overall risk exposure

conditionsupport: arguedfailure: non-exclusive-lending-relationshipfamily: otherrisk-and-incentivescompliance

• contested_by kaal:claim:2748096-007 Post-LTCM counterparty credit risk management, in which regulators pressed banks to monitor and limit the leve...
• supported_by kaal:claim:3405660-025 Competition among creditor banks undermines indirect regulation, because competing banks compromise on importa...

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