# kaal:claim:2714974-027

**Claim.** 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.

**Type.** failure  **Support.** argued

**Holds when.**

- applies to direct regulation of hedge fund leverage

**Source quote.**

> 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, page 25

**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

**Verify.** sha256 of source PDF `7764601d3ed5bb056b58949e8411eff9dfb9855f143719062030c980c5fa801b` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20and%20Oesterle%20-%202016%20-%20The%20History%20of%20Hedge%20Fund%20Regulation%20in%20the%20United%20States.pdf

**Failure mode.** Conservative calibration destroys liquidity provision  (family: liquidity-and-market-structure-failure)

**Topics.** risk-and-incentives, defi, economics, research-methods

**Keywords.** value-at-risk, leverage, market-liquidity, risk-measurement

**Related claims.**

- extended_by: https://wulfkaal.github.io/claims/3405660-024

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.