# Interconnectedness

`kaal:entity:interconnectedness`

**Status.** derived

This node is assembled mechanically from the 6 claims that carry the concept tag `interconnectedness`. 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

6 claims across 5 works, 2010 to 2024.

**2010**

- [1558614-021](https://wulfkaal.github.io/claims/1558614-021) [mechanism/argued] *(failure mode)* -- 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.
  > 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.
  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

**2012**

- [2061166-029](https://wulfkaal.github.io/claims/2061166-029) [failure/argued] *(failure mode)* -- 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.
  > 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.
  Christoph K. Henkel, Wulf A. Kaal, Contingent Capital in European Union Bank Restructuring (2012). SSRN: https://ssrn.com/abstract=2061166

**2014**

- [2470008-035](https://wulfkaal.github.io/claims/2470008-035) [failure/argued] *(failure mode)* -- 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.
  > Form PF questions 22 and 23 are directly used in FSOC's stage two analysis to determine the interconnectedness of private funds.
  Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008

**2016**

- [2748096-016](https://wulfkaal.github.io/claims/2748096-016) [mechanism/argued] -- 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.
  > 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.
  Wulf A. Kaal, Timothy A. Krause, Hedge Funds and Systemic Risk (2016). SSRN: https://ssrn.com/abstract=2748096
- [2748096-032](https://wulfkaal.github.io/claims/2748096-032) [empirical/evidenced] -- 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.
  > they find that volatility between 2001 and 2008 is transmitted across all parts of the system, including from hedge funds to brokers and banks.
  Wulf A. Kaal, Timothy A. Krause, Hedge Funds and Systemic Risk (2016). SSRN: https://ssrn.com/abstract=2748096

**2024**

- [4900880-002](https://wulfkaal.github.io/claims/4900880-002) [mechanism/asserted] -- 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.
  > This entanglement suggests that changes in one part of the economy can instantaneously affect other parts, leading to a more interconnected and dynamic system.
  Wulf A. Kaal, Quantum Economy and the Future of Work (2024). SSRN: https://ssrn.com/abstract=4900880

## 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/interconnectedness.md | sha256sum

**Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.