kaal:claim:2714974-027

Alternative risk measures such as value at risk have severe measurement problems, so any direct regulation of leverage would be set conservatively and would substantially limit hedge funds' ability to provide market liquidity.

Source quote, verbatim

Any attempt to directly regulate leverage would likely be conservative, due to measurement problems, and put major limits on hedge funds' ability to provide market liquidity.

From

Kaal and Oesterle, The History of Hedge Fund Regulation in the United States (2016), INDIRECT HEDGE FUND REGULATION, p. 25
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

applies to direct regulation of hedge fund leverage

Classification

failuresupport: arguedfailure: Conservative calibration destroys liquidity provisionfamily: liquidity-and-market-structure-failurerisk-and-incentivesdefieconomicsresearch-methods

Related claims

extended_by kaal:claim:3405660-024 Any risk assessment of hedge funds as counterparties is necessarily incomplete, because there is no common mea...

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