kaal:claim:2470008-006

Hedge funds threaten the financial system through two distinct channels: directly, by damaging systemically important financial institutions, and indirectly, by generating liquidity shocks and raising volatility in key markets.

A later claim in the corpus revises this one. Prefer quoting kaal:claim:2748096-016.

Source quote, verbatim

In addition to posing a direct systemic risk by damaging systemically important financial institutions, hedge funds can also pose an indirect threat to the financial system by generating a liquidity shock and increasing market volatility in key markets.

From

Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014), II. Systemic Risk of Private Funds
https://ssrn.com/abstract=2470008 · source PDF

Cite as

Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008

Holds when

hedge funds active in key markets
counterparty relationships with systemically important institutions

Classification

mechanismsupport: arguedprivate-fundsdefisystemic-riskrisk-and-incentiveseconomics

Related claims

contested_by kaal:claim:2748096-006 Because hedge fund losses are absorbed directly by a large and dispersed body of investors and their equity ca...
supported_by kaal:claim:2748096-002 Despite conflicting government reports, the weight of post-crisis evidence from leading financial economists s...

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Attestation record: colloquium/attestations/ce20f0d0504fcd22...json
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