Any conclusion that hedge funds contributed to the financial crisis of 2007-2008 is circumstantial or anecdotal, because the data needed to test it, on leverage, counterparty relations, AUM, and portfolio holdings, were not collected for any substantial period before the crisis.
Source quote, verbatim
Without such data for a substantial time period before the financial crisis, concluding that hedge funds may have had a role in the financial crisis is circumstantial or anecdotal.
From
Wulf A. Kaal, Timothy A. Krause, Hedge Funds and Systemic Risk (2016), Hedge Funds' Contributions to the Financial Crisis of 2007-2008, p. 5 https://ssrn.com/abstract=2748096 · source PDF
Cite as
Wulf A. Kaal, Timothy A. Krause, Hedge Funds and Systemic Risk (2016). SSRN: https://ssrn.com/abstract=2748096
Holds when
applies to retrospective assessment of the 2007-2008 crisis
SEC systemic risk data collection began only after Title IV of the Dodd-Frank Act
Classification
failuresupport: arguedfailure: pre-crisis data gapfamily: data-quality-and-comparabilitysystemic-riskresearch-methodsrisk-and-incentivescitation-and-knowledge
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