# Basel framework `kaal:entity:basel-framework` **Status.** derived This node is assembled mechanically from the 8 claims that carry the concept tag `basel-framework`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself. ## Every claim under this term 8 claims across 1 works, 2019 to 2019. **2019** - [3405660-027](https://wulfkaal.github.io/claims/3405660-027) [design/argued] -- The Basel framework serves indirect hedge fund regulation by aligning regulatory capital requirements more closely with underlying risks and by giving banks and supervisors several options for assessing capital adequacy. > The Basel framework aligns regulatory capital requirements more closely with underlying risks, and provides banks and their supervisors with several options for the assessment of capital adequacy. Kaal, Indirect Regulation of Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3405660 - [3405660-030](https://wulfkaal.github.io/claims/3405660-030) [design/asserted] -- Applying the Basel Framework to hedge fund regulation conforms to the requirements of incomplete contract theory, which supplies the theoretical justification for the indirect approach. > Applying the Basel Framework to hedge fund regulation is in conformity with the requirements of incomplete contract theory. Kaal, Indirect Regulation of Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3405660 - [3405660-031](https://wulfkaal.github.io/claims/3405660-031) [mechanism/argued] -- Indirect regulation removes the problem of missing jurisdictional authority and therefore of jurisdictional arbitrage, because the Basel Framework applies to banks worldwide rather than to funds in any one jurisdiction. > Indirect regulation of hedge funds removes the problem of lacking jurisdictional authority and, thus, jurisdictional arbitrage. The Basel Framework is a framework for banks worldwide. Kaal, Indirect Regulation of Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3405660 - [3405660-033](https://wulfkaal.github.io/claims/3405660-033) [mechanism/argued] -- 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). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3405660 - [3405660-034](https://wulfkaal.github.io/claims/3405660-034) [mechanism/argued] -- Market discipline, internal ratings and supervisory review under the Basel Framework change bank lending practice and disclosure, which in turn lowers hedge fund leverage and mitigates moral hazard of the kind seen at LTCM. > Moral hazard problems are addressed because the Basel Framework guarantees, by introducing market discipline, internal ratings and supervisory review, a change in lending practice and disclosure. This, in turn, will further decrease the capital – leverage ratio of hedge funds. Kaal, Indirect Regulation of Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3405660 - [3405660-036](https://wulfkaal.github.io/claims/3405660-036) [mechanism/argued] -- The internal ratings based approach reduces information asymmetry because internal ratings capture supplementary borrower information that external credit assessors cannot reach and cover a broader range of borrowers. > internal ratings may incorporate supplementary information about borrowers that is usually beyond the reach of institutions providing external credit assessments, and may cover a much broader range of borrowers Kaal, Indirect Regulation of Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3405660 - [3405660-039](https://wulfkaal.github.io/claims/3405660-039) [mechanism/argued] -- Because the Basel Framework applies on a consolidated basis to the holding companies of banking groups, it captures risks across the whole group and so addresses the complex structures that defeat prudential supervision. > The Basel Framework is extended on a consolidated basis to holding companies of banking groups in order to ensure that risks within the entire banking group are considered. Kaal, Indirect Regulation of Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3405660 - [3405660-040](https://wulfkaal.github.io/claims/3405660-040) [mechanism/argued] -- Indirect regulation through Basel banking supervision removes the need for joint regulatory action and avoids each national regulator's transaction and implementation costs, because an international framework requires only one implementation and compliance then falls to participating banks. > Indirect regulation of hedge funds via the banking supervision in the Basel Framework also removes the need for joint regulatory action and individual regulators' transaction costs and implementation costs. Kaal, Indirect Regulation of Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3405660 ## Verify Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust. curl -s https://wulfkaal.github.io/entities/basel-framework.md | sha256sum **Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.