# kaal:claim:2748096-020

**Claim.** The systemic risk of hedge fund leverage comes from its capacity to amplify liquidity losses and to contribute to asset overvaluation during bull markets, not from leverage as such.

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

**Source quote.**

> Systemic risks associated with hedge funds' use of leverage stems from its ability to amplify liquidity losses and contribute to the overvaluation of assets during bull markets.

**From.** Wulf A. Kaal, Timothy A. Krause, *Hedge Funds and Systemic Risk* (2016), Leverage, page 8

**Cite as.** Wulf A. Kaal, Timothy A. Krause, Hedge Funds and Systemic Risk (2016). SSRN: https://ssrn.com/abstract=2748096

**Verify.** sha256 of source PDF `8f30260f2c1db728b45c4f3b9b7c64358cf9d3217277bc3c63a910c32f87b508` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20and%20Krause%20-%202016%20-%20Hedge%20Funds%20and%20Systemic%20Risk.pdf

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

**Keywords.** leverage, liquidity, asset-overvaluation, systemic-risk

**Related claims.**

- supersedes: https://wulfkaal.github.io/claims/2470008-005

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