{
 "@context": "https://schema.org",
 "@type": "DefinedTerm",
 "@id": "https://wulfkaal.github.io/entities/interconnectedness",
 "identifier": "kaal:entity:interconnectedness",
 "name": "Interconnectedness",
 "termCode": "interconnectedness",
 "inDefinedTermSet": {
  "@id": "https://wulfkaal.github.io/entities/index.json"
 },
 "author": {
  "@type": "Person",
  "name": "Wulf A. Kaal",
  "identifier": "https://orcid.org/0000-0003-0757-275X"
 },
 "dateModified": "2026-07-29",
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   "value": 6
  },
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   "value": 5
  },
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   "value": [
    "2010",
    "2024"
   ]
  },
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  }
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 "subjectOf": [
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/1558614-021",
   "identifier": "kaal:claim:1558614-021",
   "text": "Because U.S. companies historically financed themselves through markets rather than through each other, U.S. managers are less attuned to risks accumulating at other firms, a blind spot that mattered once swaps and other complex instruments made firms directly vulnerable to each other's conditions.",
   "abstract": "Historically, U.S. companies have relied on markets for financing more than they have relied on each other, meaning U.S. managers are perhaps less aware than they should be of the risks that are being incurred by companies other than their own.",
   "citation": "Painter and Kaal, Initial Reflections on an Evolving Standard Constraints on Risk Taking by Directors and Officers in (2010). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1558614",
   "datePublished": "2010",
   "claim_type": "mechanism",
   "confidence": "argued",
   "is_failure_mode": true,
   "scope_conditions": [
    "applies once counterparty exposure through swaps and complex instruments becomes significant"
   ],
   "source_pdf_sha256": "e898211630f4116879329d6de8397523dca5b066864147421aa5cbc7429dc83b",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/2061166-029",
   "identifier": "kaal:claim:2061166-029",
   "text": "Building critical mass in the contingent capital securities market could require banks and other financial institutions to buy their competitors' contingent capital securities, which would raise ethical, antitrust and incentive concerns.",
   "abstract": "Developing a critical mass for the market in contingent capital securities could require banks and other financial institutions to purchase their competitors' contingent capital securities.533 That could raise ethical, antitrust, and incentive concerns.",
   "citation": "Christoph K. Henkel, Wulf A. Kaal, Contingent Capital in European Union Bank Restructuring (2012). SSRN: https://ssrn.com/abstract=2061166",
   "datePublished": "2012",
   "claim_type": "failure",
   "confidence": "argued",
   "is_failure_mode": true,
   "scope_conditions": [
    "where non-bank demand is insufficient to absorb issuance volumes"
   ],
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  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/2470008-035",
   "identifier": "kaal:claim:2470008-035",
   "text": "The Form PF counterparty questions most affected by filer interpretation, Questions 22 and 23, are the very ones the FSOC uses in stage two to determine the interconnectedness of private funds.",
   "abstract": "Form PF questions 22 and 23 are directly used in FSOC's stage two analysis to determine the interconnectedness of private funds.",
   "citation": "Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008",
   "datePublished": "2014",
   "claim_type": "failure",
   "confidence": "argued",
   "is_failure_mode": true,
   "scope_conditions": [
    "FSOC stage two analysis of interconnectedness"
   ],
   "source_pdf_sha256": "5f68a401c935527d89658171e9b48a4d186710459aaf2bdbead755507394e8c9",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/2748096-016",
   "identifier": "kaal:claim:2748096-016",
   "text": "Even if the risks hedge funds pose to financial institutions are often overstated, liquidity risk remains a serious issue because of the critical linkages created by over-the-counter credit risk relations.",
   "abstract": "While the risks to financial institutions are often overstated, liquidity risk remains a serious issue due to the critical linkages created by over-the-counter credit risk relations.",
   "citation": "Wulf A. Kaal, Timothy A. Krause, Hedge Funds and Systemic Risk (2016). SSRN: https://ssrn.com/abstract=2748096",
   "datePublished": "2016",
   "claim_type": "mechanism",
   "confidence": "argued",
   "is_failure_mode": false,
   "scope_conditions": [
    "applies where hedge fund exposures run through over-the-counter credit relationships"
   ],
   "source_pdf_sha256": "8f30260f2c1db728b45c4f3b9b7c64358cf9d3217277bc3c63a910c32f87b508",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/2748096-032",
   "identifier": "kaal:claim:2748096-032",
   "text": "Although hedge fund return volatility is less sensitive to financial system risks than that of brokers, banks, and insurance companies, nonlinear Granger causality tests show that between 2001 and 2008 volatility was transmitted across all parts of the system, including from hedge funds to brokers and banks.",
   "abstract": "they find that volatility between 2001 and 2008 is transmitted across all parts of the system, including from hedge funds to brokers and banks.",
   "citation": "Wulf A. Kaal, Timothy A. Krause, Hedge Funds and Systemic Risk (2016). SSRN: https://ssrn.com/abstract=2748096",
   "datePublished": "2016",
   "claim_type": "empirical",
   "confidence": "evidenced",
   "is_failure_mode": false,
   "scope_conditions": [
    "2001 to 2008 sample",
    "result depends on nonlinear Granger causality tests rather than principal components analysis"
   ],
   "source_pdf_sha256": "8f30260f2c1db728b45c4f3b9b7c64358cf9d3217277bc3c63a910c32f87b508",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/4900880-002",
   "identifier": "kaal:claim:4900880-002",
   "text": "Because the states of economic agents are entangled, a change in one part of the economy can affect other parts instantaneously rather than through a traceable chain of transmission, producing a more interconnected and dynamic system than classical economics can describe.",
   "abstract": "This entanglement suggests that changes in one part of the economy can instantaneously affect other parts, leading to a more interconnected and dynamic system.",
   "citation": "Wulf A. Kaal, Quantum Economy and the Future of Work (2024). SSRN: https://ssrn.com/abstract=4900880",
   "datePublished": "2024",
   "claim_type": "mechanism",
   "confidence": "asserted",
   "is_failure_mode": false,
   "scope_conditions": [],
   "source_pdf_sha256": "64ea6e8b7cfb3d9a83801eba54f9b87182b842a963273ddab7f2d5305639db73",
   "status": "current"
  }
 ],
 "description": "6 claims in the published works of Wulf A. Kaal carry the concept tag 'interconnectedness'. Derived node: a roster, not an adjudicated definition."
}