kaal:claim:2748096-039

Hedge funds have the potential both to amplify and to mitigate systemic risk, and which effect dominates turns on their particular risk management incentives, leverage, and investment strategies, which is why the academic evidence remains mixed.

Source quote, verbatim

Hedge funds may have the potential to amplify and/or mitigate systemic risks due to their particular risk management incentives, leverage, and investment strategies.

From

Wulf A. Kaal, Timothy A. Krause, Hedge Funds and Systemic Risk (2016), SUMMARY AND CONCLUSIONS, p. 20
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

conclusion drawn from the mixed post-crisis literature

Classification

conditionsupport: arguedsystemic-riskrisk-and-incentivesprivate-funds

Related claims

supersedes kaal:claim:2470008-005 The systemic risk of hedge funds arises principally from the combination of aggressive investment strategies a...

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