kaal:claim:3405660-033

The Basel Framework reduces systemic risk by regulating bank credit standards, which indirectly constrains hedge fund leverage and makes credit markets safer.

Systemic risk problems are addressed because the Basel Framework regulates the credit standards of banks but indirectly also hedge funds' level of leverage. Hence, credit markets are saver.

Kaal, Indirect Regulation of Hedge Funds (2019), V. Conclusion, p. 25
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

mechanismsupport: arguedsystemic-riskrisk-and-incentives

• restates kaal:claim:2714974-032 Indirect regulation through bank capital adequacy standards can reach systemic risk because those standards al...
• extends kaal:claim:2470008-005 The systemic risk of hedge funds arises principally from the combination of aggressive investment strategies a...

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