entity · derived
Indirect regulation
Derived node: assembled mechanically from the claims carrying indirect-regulation. A roster, not an adjudicated definition.
Every claim under this term
- 1806252-003 : Building on the increase in capital requirements for counterparty risk already suggested in Basel III, Basel III could add a charge on banks' assets based on their lending exposure to hedge funds.
- 1806252-011 : Banks' lending practices and counterparty credit risk management can curtail hedge funds' excessive risk taking because banks can use the threat of cutting off future lending to change a fund's behavi
- 1806252-012 : Banks are ideally positioned to deal with asymmetric information, moral hazard, and systemic issues pertaining to hedge funds, which is why hedge fund regulation should run through bank regulation.
- 1806252-025 : Basel III capital charges based on a bank's lending exposure to hedge funds could help address the threat of regulatory arbitrage.
- 1806252-028 : A standard objection to indirect regulation is that counterparty credit risk management will not work effectively unless the lending bank has an exclusive relationship with the hedge fund that lets it
- 1806252-029 : Contesting the exclusivity objection, exclusivity of a banking relationship is not the only effective way to exercise control and manage risk: the intensity, endurance, and quality of the relationship
- 1806252-030 : Because some hedge fund trading strategies depend on the immediate availability of capital and will not work without sufficient lines of credit, banks may retain enough influence over hedge funds even
- 2470008-013 : The absence of financial market repercussions from the Amaranth failure suggests that indirect regulation of private funds, achieved by having regulators press banks to limit leverage extended to thei
- 2714974-030 : Proposals for indirect regulation of hedge funds through the regulation of the financial institutions that interact with them are unlikely to become legally binding.
- 2714974-031 : Banks are uniquely positioned to discipline hedge fund behavior because their role as lenders, market makers, and product creators lets them use the threat of cutting off future lending as leverage ov
- 2714974-032 : Indirect regulation through bank capital adequacy standards can reach systemic risk because those standards alter not only banks' credit standards but also counterparty credit risk and therefore hedge
- 2998097-008 : Fund managers are unlikely to escape bank based indirect supervision by terminating a lending relationship, because their dynamic trading strategies depend on the immediate availability of capital and
- 2998097-009 : Data on the credit derivatives market show that since 2000 private investment funds steadily increased their share of that market while banks' role declined, which supports shifting regulatory emphasi
- 3405660-005 : Indirect regulation of hedge funds attains most regulatory objectives while still leaving the industry the operating freedom it needs, which makes it preferable to the direct alternatives.
- 3405660-019 : Indirect regulation is defined as a regulatory approach that regulates the counterparties and intermediaries of hedge funds rather than the hedge funds themselves, addressing the critical regulatory i
- 3405660-020 : Indirect regulation is often the only feasible tool available, because in many jurisdictions regulators lack full direct regulatory authority over hedge funds and can act only through the regulated en
- 3405660-021 : Indirect regulation minimizes regulatory expense by relying on the private sector risk practices of counterparties and creditors, producing an equilibrium between regulatory cost and regulatory attain
- 3405660-022 : Indirect regulation lets hedge funds preserve the opacity their strategies require, on the condition that their counterparties rather than the funds become the primary regulatory targets.
- 3405660-023 : Indirect regulation asks banks to fully assess the risk they incur from hedge fund counterparties, but that assessment is often dubious at best because of the opacity of hedge fund activity.
- 3405660-024 : Any risk assessment of hedge funds as counterparties is necessarily incomplete, because there is no common measure for calculating leverage and exposure and because fund trading strategies are dynamic
- 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.
- 3405660-027 : 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 assessi
- 3405660-029 : The three pillars of Basel II and its successors are rules addressed to banks that thereby indirectly regulate hedge funds.
- 3405660-030 : 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.
- 3405660-031 : 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 an
- 3405660-032 : By letting funds implement their own risk monitoring systems, indirect regulation avoids compliance costs that would otherwise threaten the profitability needed to justify the 2 and 20 fee structure t
- 3405660-035 : Indirect regulation makes ex post opportunism by hedge funds less likely because the financial intermediaries, not just the funds, stand to lose reputation and market position if their counterparty ri
- 3405660-038 : Under an indirect approach hedge funds can remain exempt from disclosure and transparency requirements because only the financial intermediaries are required to reveal the relevant information, which
- 3405660-040 : 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 f