kaal:claim:2714974-025

There are no legal limits on hedge fund leverage; the only constraint comes from market discipline supplied by creditors and counterparties through interest rates, credit availability, credit limits, initial margin, and credit spreads.

Source quote, verbatim

Any limits on a hedge fund's use of leverage come from the market discipline provided by creditors and counterparties.

From

Kaal and Oesterle, The History of Hedge Fund Regulation in the United States (2016), Leverage, p. 22
https://ssrn.com/abstract=2714974 · source PDF

Cite as

Kaal and Oesterle, The History of Hedge Fund Regulation in the United States (2016). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2714974

Holds when

contrasts with registered investment companies, which face direct statutory limits

Classification

conditionsupport: assertedeconomicsrisk-and-incentives

Related claims

extended_by kaal:claim:3405660-010 Hedge fund disclosure to counterparties and investors relies on balance sheet concepts that are uninformative ...

Verify

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Attestation record: colloquium/attestations/00f34dc0e485e871...json
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