# kaal:claim:3405660-012

**Claim.** Banks continue to find hedge fund business desirable because hedge funds take risks other participants will not, borrow heavily and pay a premium for borrowing, which sustains the lending relationship despite its dangers.

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

**Source quote.**

> Hedge funds are significant clients and counterparties to banks, particularly because they take on risks that other financial participants would not, borrow massive amounts and are willing to pay a premium for borrowing. Therefore, banks management still view business from hedge funds as desirable.

**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

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

**Keywords.** bank-lending, hedge-fund-counterparties, incentives, credit-markets

**Related claims.**

- supports: https://wulfkaal.github.io/claims/1806252-002

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