# kaal:claim:2714974-032

**Claim.** Indirect regulation through bank capital adequacy standards can reach systemic risk because those standards alter not only banks' credit standards but also counterparty credit risk and therefore hedge funds' level of leverage.

**Type.** mechanism  **Support.** argued

**Holds when.**

- applies to banks and counterparties subject to capital adequacy standards

**Source quote.**

> Indirect regulation through capital adequacy standards could also address issues of systemic risk because capital adequacy standards will not only regulate and alter credit standards of banks, but also counterparty credit risk and, thus, hedge funds' level of leverage.

**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

**Topics.** systemic-risk, risk-and-incentives

**Keywords.** capital-adequacy, indirect-regulation, systemic-risk, leverage

**Related claims.**

- generalizes: https://wulfkaal.github.io/claims/3405660-027
- extends: https://wulfkaal.github.io/claims/1806252-011
- restated_by: https://wulfkaal.github.io/claims/3405660-033

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