kaal:claim:2714974-026

Direct regulation of hedge fund leverage collapses on the details because balance sheet leverage is not an adequate measure of risk and would push funds into off-balance sheet avoidance strategies.

Balance sheet leverage is not an adequate measure of risk and would encourage avoidance behavior with off-balance sheet strategies.

Kaal and Oesterle, The History of Hedge Fund Regulation in the United States (2016), INDIRECT HEDGE FUND REGULATION, p. 24
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

• applies to proposals for direct leverage regulation

failuresupport: arguedfailure: Balance sheet leverage mismeasurementfamily: measurement-and-metric-failureregulatory-failureresearch-methodsrisk-and-incentives

• extended_by kaal:claim:3405660-024 Any risk assessment of hedge funds as counterparties is necessarily incomplete, because there is no common mea...
• supported_by kaal:claim:3405660-010 Hedge fund disclosure to counterparties and investors relies on balance sheet concepts that are uninformative ...

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