kaal:claim:3405660-025

Competition among creditor banks undermines indirect regulation, because competing banks compromise on important elements of the risk management process and agree to overly generous credit conditions.

Competition among creditor banks can also lead to compromising on important elements of the risk management process and agreeing to overly generous credit conditions.

Kaal, Indirect Regulation of Hedge Funds (2019), IV. Indirect Regulation, p. 19
https://ssrn.com/abstract=3405660 · source PDF

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

• multiple banks competing to lend to the same hedge funds

failuresupport: arguedfailure: creditor competition erosionfamily: supervisory-capacity-gapeconomicsrisk-and-incentives

• supports kaal:claim:1806252-028 A standard objection to indirect regulation is that counterparty credit risk management will not work effectiv...

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