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.

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

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

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

• contrasts with registered investment companies, which face direct statutory limits

conditionsupport: assertedeconomicsrisk-and-incentives

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

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• Qualification: Hedge fund regulation, market discipline and the Hedge Fund Working Group
• Qualification: The limits of EU hedge fund regulation