entity · derived
Leverage
Derived node: assembled mechanically from the claims carrying leverage. A roster, not an adjudicated definition.
Every claim under this term
- 1806252-034 : Without the threat of systemic risk and without a clear delineation of the social externalities that hedge funds cause, the purpose of direct hedge fund regulation is unclear.
- 1998455-002 : The implicit guarantees contained in a bailout multiply the incentives for systemically important financial institutions to increase leverage, because those guarantees make debt cheaper than equity.
- 2389423-013 : Registered investment advisers must report systemic risk relevant information to the SEC, including trading practices, trading and investment positions, the amount of assets under management, valuatio
- 2470008-005 : The systemic risk of hedge funds arises principally from the combination of aggressive investment strategies and high leverage with adverse price movements that can dry up credit and depress the marke
- 2470008-027 : The FSOC itself conceded that available data was insufficient when it tried to identify the activities of the twenty largest United States fund managers as possible sources of systemic risk.
- 2714974-005 : The collapse of Long Term Capital Management in 1998 and its Federal Reserve orchestrated bailout made hedge fund risk to international markets apparent, and concerns over excessive leverage combined
- 2714974-025 : There are no legal limits on hedge fund leverage; the only constraint comes from market discipline supplied by creditors and counterparties through interest rates, credit availability, credit limits,
- 2714974-026 : Direct regulation of hedge fund leverage collapses on the details because balance sheet leverage is not an adequate measure of risk and would push funds into off-balance sheet avoidance strategies.
- 2714974-027 : Alternative risk measures such as value at risk have severe measurement problems, so any direct regulation of leverage would be set conservatively and would substantially limit hedge funds' ability to
- 2714974-028 : Direct regulation of hedge fund leverage increases moral hazard costs, because lenders and counterparties relax their own vigilance once they rely on government rules to constrain fund risk taking.
- 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
- 2714974-036 : The combined restrictions on registered investment company short selling, leverage, and organizational structure create a substantial disincentive for such companies to pursue absolute return strategi
- 2715083-016 : Freedom from significant regulatory oversight is what historically enabled hedge funds to run more exotic, more leveraged strategies aimed at absolute returns.
- 2715083-038 : Rising demand for alternative strategies creates incentives for mutual fund managers to find ways to simulate leverage, in an industry that historically used little leverage and presented little risk.
- 2715083-039 : The mutual fund industry of the future could carry more risk than its historical averages suggest, a possibility with systemic implications given the comparative size of the mutual fund market.
- 2748096-005 : The combination of unprecedented private fund industry growth and the low interest rate environment produced by post-crisis quantitative easing pushed private fund managers into reaching for yield, an
- 2748096-008 : Market events like the LTCM failure can escalate into global financial crises when many highly leveraged hedge funds holding illiquid portfolios are obligors of a small number of major financial insti
- 2748096-020 : The systemic risk of hedge fund leverage comes from its capacity to amplify liquidity losses and to contribute to asset overvaluation during bull markets, not from leverage as such.
- 2748096-022 : Concern about hedge fund leverage is empirically overstated: since the collapse of LTCM in 1998 the industry's exposure to leverage has been relatively modest, especially compared with the mean levera
- 2811729-014 : The SEC's interpretation of Section 18 leaves a mutual fund subject to no statutory limitation or cap on its ability to borrow through the use of derivative instruments, provided the fund adheres to i
- 2957645-015 : Contingent capital is an automatic mechanism for increasing capital while reducing debt, and its long term benefit is lowering leverage.
- 2998097-003 : Because banks and brokers had let LTCM borrow the full value of its collateral, LTCM's 4.8 billion dollars in capital dissipated quickly once banks began making margin calls.
- 3396522-020 : Leverage offered by cryptocurrency exchanges worsens rather than cures the market's illiquidity, because borrowed money rather than genuine demand is driving the price.
- 3405660-008 : The same leverage that produced LTCM's high returns magnified its losses, so leverage is a symmetric amplifier rather than a one directional source of performance.
- 3405660-009 : Before its collapse LTCM held roughly $4.8 billion in capital while controlling $160 billion in stocks and bonds, with derivatives of a notional value of $1 trillion.
- 3405660-033 : The Basel Framework reduces systemic risk by regulating bank credit standards, which indirectly constrains hedge fund leverage and makes credit markets safer.