# kaal:claim:3405660-011

**Claim.** LTCM reached systemically dangerous size because banks lent to it without regard to repayment capacity, and in doing so the banks endangered their own existence.

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

**Source quote.**

> LTCM grew as large as it did because banks lent it money without regard for whether this money could be paid back. Banks put their own existence at risk with their lending practices during this time.

**From.** Kaal, *Indirect Regulation of Hedge Funds* (2019), II.1 Industry Practices, page 10

**Cite as.** Kaal, Indirect Regulation of Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3405660

**Verify.** sha256 of source PDF `cf507b1833071765bc13a5605f38c2591582eca85f40869e38b6ff075c04d29d` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202019%20-%20Indirect%20Regulation%20of%20Hedge%20Funds.pdf

**Failure mode.** lax creditor underwriting  (family: systemic-risk-transmission)

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

**Keywords.** bank-lending, ltcm, credit-standards, systemic-risk

**Related claims.**

- restates: https://wulfkaal.github.io/claims/2998097-004
- extends: https://wulfkaal.github.io/claims/2998097-003

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