{
 "failure_mode": "supervisory-capacity-gap",
 "specific_names": [
  "Absent institutional capacity for data-driven anticipation",
  "Constrained information sharing between regulators",
  "False positive regulatory resource waste",
  "No going-concern reorganization path for German banks",
  "Political complexity paralysis",
  "Political confusion under complexity",
  "Recovery-plan deadline unusable under time pressure",
  "Shareholder valuation proceedings slow bank reorganization",
  "Under-resourced charity regulator",
  "Underfunded supervision leaves a monitoring void",
  "Undersized and slow-to-mobilize resolution fund",
  "advice-beyond-lawyer-competence",
  "arbiter-expertise-deficit",
  "centralized information reliance",
  "centralized-supervision-deficiency",
  "compliance-analytics-scale-gap",
  "creditor competition erosion",
  "declining reserve audit coverage",
  "distributed-oversight-opacity",
  "double failure of U.S. risk control",
  "evaluative capacity gap for systemic risk data",
  "expertise-defeated-by-language",
  "interpreter-mediated-adjudication",
  "judicial-learning-deficit",
  "kapmug-administrative-burden",
  "limited-judicial-capacity",
  "misdirected regulatory focus",
  "policy-implementation-gap",
  "prosecutorial expertise gap",
  "prudential model underspecification",
  "regulator expertise gap",
  "regulator over-reaction from unsophistication",
  "regulator-staffing-gap",
  "regulatory resource shortfall",
  "review-cost-deterrence",
  "reviewer overload from long queues",
  "structural opacity constraint",
  "sunset-review-burden",
  "unreliable counterparty risk assessment"
 ],
 "count": 39,
 "claims": [
  {
   "id": "kaal:claim:617681-014",
   "url": "https://wulfkaal.github.io/claims/617681-014",
   "claim": "Conducting judicial proceedings through interpreters is cumbersome and confusing and creates a perceived bias in favor of litigants and lawyers fluent in the language of the proceedings, which is a barrier to exporting adjudication.",
   "specific_name": "interpreter-mediated-adjudication",
   "conditions": [
    "Member States whose courts do not conduct proceedings in English"
   ],
   "source": "Regulatory Competition in EU Corporate Law after Inspire Art Unbundling Delaware's Product for Euro",
   "year": "2004",
   "quote": "Conducting judicial proceedings through interpreters, however, is cumbersome and confusing, and also creates a perceived bias in favor of litigants and lawyers who are fluent in the language of the proceedings.",
   "citation": "Christian Kirchner, Richard W. Painter, Wulf A. Kaal, Regulatory Competition in EU Corporate Law after Inspire Art Unbundling Delaware's Product for Euro (2004). SSRN: https://ssrn.com/abstract=617681"
  },
  {
   "id": "kaal:claim:617681-031",
   "url": "https://wulfkaal.github.io/claims/617681-031",
   "claim": "Because the judiciary in many European jurisdictions is a specialized career entered shortly after university and without significant private practice experience, European judges lack the practice background that facilitates learning to adjudicate complex corporate disputes.",
   "specific_name": "judicial-learning-deficit",
   "conditions": [
    "most EU Member States other than the United States model of lateral judicial appointment"
   ],
   "source": "Regulatory Competition in EU Corporate Law after Inspire Art Unbundling Delaware's Product for Euro",
   "year": "2004",
   "quote": "the judiciary is a specialized career that one enters shortly after university training and without significant experience in private practice. Lack of practice experience does not facilitate learning how to adjudicate disputes arising out of complex corporate transactions.",
   "citation": "Christian Kirchner, Richard W. Painter, Wulf A. Kaal, Regulatory Competition in EU Corporate Law after Inspire Art Unbundling Delaware's Product for Euro (2004). SSRN: https://ssrn.com/abstract=617681"
  },
  {
   "id": "kaal:claim:617681-041",
   "url": "https://wulfkaal.github.io/claims/617681-041",
   "claim": "Expert judges in national courts who cannot understand the arguments of lawyers before them or read documents written in another language may not be experts at all, so the American model of state appointed expert corporate judges does not transfer to multilingual Europe.",
   "specific_name": "expertise-defeated-by-language",
   "conditions": [
    "Europe, in contrast with the single language United States"
   ],
   "source": "Regulatory Competition in EU Corporate Law after Inspire Art Unbundling Delaware's Product for Euro",
   "year": "2004",
   "quote": "but in Europe \"expert\" judges in national courts who cannot understand the arguments of lawyers before them or who cannot read underlying documents written in another language may not be experts at all.",
   "citation": "Christian Kirchner, Richard W. Painter, Wulf A. Kaal, Regulatory Competition in EU Corporate Law after Inspire Art Unbundling Delaware's Product for Euro (2004). SSRN: https://ssrn.com/abstract=617681"
  },
  {
   "id": "kaal:claim:1428387-033",
   "url": "https://wulfkaal.github.io/claims/1428387-033",
   "claim": "Mandatory risk disclosure to the SEC would probably fail on staffing grounds, because professionals capable of understanding hedge fund risk data would be disincentivized to use that knowledge for supervision rather than economic gain, finding the private sector far more lucrative.",
   "specific_name": "regulator-staffing-gap",
   "conditions": [
    "where the regulator must interpret data on hard-to-value assets and complex instruments"
   ],
   "source": "Hedge Fund Valuation Retailization, Regulation, and Investor Suitability",
   "year": "2009",
   "quote": "Professionals who could understand the risk data would probably be disincentivized to use their knowledge for purposes of supervision rather than economic gain. Knowledgeable risk analysts may find the private sector much more lucrative than the public sector.",
   "citation": "Kaal, Hedge Fund Valuation Retailization, Regulation, and Investor Suitability (2009). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1428387"
  },
  {
   "id": "kaal:claim:1558614-034",
   "url": "https://wulfkaal.github.io/claims/1558614-034",
   "claim": "The U.S. approach left both of its risk controls ineffective: the securities disclosure regime failed to prevent the 2008 financial crisis, while the expansive business judgment rule that permitted the risk taking in the first place survived the crisis unchanged.",
   "specific_name": "double failure of U.S. risk control",
   "conditions": [],
   "source": "Initial Reflections on an Evolving Standard Constraints on Risk Taking by Directors and Officers in",
   "year": "2010",
   "quote": "The much-touted U.S. securities disclosure regime failed to prevent the 2008 financial crisis, yet the expansive U.S. version of the business judgment rule in cor- porate law that allowed the risk taking to begin with has remained in- tact.",
   "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"
  },
  {
   "id": "kaal:claim:2061166-011",
   "url": "https://wulfkaal.github.io/claims/2061166-011",
   "claim": "Before the 2010 reform, the German regulatory intervention regime for financial institutions contained no procedure that would have reliably permitted a bank to be operated as a going concern during the financial crisis.",
   "specific_name": "No going-concern reorganization path for German banks",
   "conditions": [
    "German law prior to the Financial Institution Reorganization Act entering into force on January 1, 2011"
   ],
   "source": "Contingent Capital in European Union Bank Restructuring",
   "year": "2012",
   "quote": "In addition, the German regulatory intervention regime for financial institutions did not allow for any procedure that would have reliably permitted operating a bank as a going concern during the financial crisis.",
   "citation": "Christoph K. Henkel, Wulf A. Kaal, Contingent Capital in European Union Bank Restructuring (2012). SSRN: https://ssrn.com/abstract=2061166"
  },
  {
   "id": "kaal:claim:2061166-012",
   "url": "https://wulfkaal.github.io/claims/2061166-012",
   "claim": "The German provision allowing appropriate compensation of shareholders whose rights are impaired can defeat the statute's own purpose, because time is of the essence in bank reorganization and the appointment of a court-appointed expert to value shareholder claims may significantly slow the procedure.",
   "specific_name": "Shareholder valuation proceedings slow bank reorganization",
   "conditions": [
    "reorganization procedure under the German Financial Institution Reorganization Act",
    "where shareholders' rights are permanently impaired by the plan"
   ],
   "source": "Contingent Capital in European Union Bank Restructuring",
   "year": "2012",
   "quote": "Time is of the essence in any bank reorganization and the appointment of an expert may significantly slow down the procedure, making it less effective.",
   "citation": "Christoph K. Henkel, Wulf A. Kaal, Contingent Capital in European Union Bank Restructuring (2012). SSRN: https://ssrn.com/abstract=2061166"
  },
  {
   "id": "kaal:claim:2061166-016",
   "url": "https://wulfkaal.github.io/claims/2061166-016",
   "claim": "The supervisor's discretion to set a deadline for a recovery plan before issuing a transfer order is unlikely ever to be exercised in practice, because in a crisis time will be of the essence to prevent contagion.",
   "specific_name": "Recovery-plan deadline unusable under time pressure",
   "conditions": [
    "asset transfer to a bridge bank under the German Banking Act",
    "crisis conditions with contagion risk"
   ],
   "source": "Contingent Capital in European Union Bank Restructuring",
   "year": "2012",
   "quote": "Considering the turmoil of the financial crisis, it is doubtful that the Authority will ever have the privilege to exercise this discretion as time will be of the essence to prevent contagion.",
   "citation": "Christoph K. Henkel, Wulf A. Kaal, Contingent Capital in European Union Bank Restructuring (2012). SSRN: https://ssrn.com/abstract=2061166"
  },
  {
   "id": "kaal:claim:2061166-019",
   "url": "https://wulfkaal.github.io/claims/2061166-019",
   "claim": "The German reorganization fund's maximum volume of 70 billion euros may not suffice in a financial crisis, and the availability of those funds and the time needed to raise them are an even greater concern than the ceiling itself.",
   "specific_name": "Undersized and slow-to-mobilize resolution fund",
   "conditions": [
    "German reorganization fund under the Restructuring Fund Law"
   ],
   "source": "Contingent Capital in European Union Bank Restructuring",
   "year": "2012",
   "quote": "Another point of contention is the size of the fund with a maximum volume of 70 billion euros.447 It is questionable if this amount will suffice during a financial crisis. The availability of these funds and the time it will take to raise them is of even greater concern.",
   "citation": "Christoph K. Henkel, Wulf A. Kaal, Contingent Capital in European Union Bank Restructuring (2012). SSRN: https://ssrn.com/abstract=2061166"
  },
  {
   "id": "kaal:claim:2029983-019",
   "url": "https://wulfkaal.github.io/claims/2029983-019",
   "claim": "The German KapMuG does not relieve trial judges of deciding the legal issues in every individual case, so it remains administratively burdensome even though its model case judgment binds the trial courts.",
   "specific_name": "kapmug-administrative-burden",
   "conditions": [
    "German model case proceedings for capital markets claims"
   ],
   "source": "Forum Competition and Choice of Law Competition in Securities Law after Morrison v. National Austral",
   "year": "2012",
   "quote": "The KapMuG, how- ever, does not discharge the trial judges from addressing the legal issues in each and every case individually.",
   "citation": "Wulf A. Kaal, Richard W. Painter, Forum Competition and Choice of Law Competition in Securities Law after Morrison v. National Austral (2012). SSRN: https://ssrn.com/abstract=2029983"
  },
  {
   "id": "kaal:claim:2029983-036",
   "url": "https://wulfkaal.github.io/claims/2029983-036",
   "claim": "U.S. courts have only a limited capacity to integrate parties' choice of law into a post-Morrison regime for defining transaction location, and adding variables raises the risk of inconsistent case law across districts and circuits.",
   "specific_name": "limited-judicial-capacity",
   "conditions": [
    "absent a clear mandate in Morrison and given the statutory bar on opting out"
   ],
   "source": "Forum Competition and Choice of Law Competition in Securities Law after Morrison v. National Austral",
   "year": "2012",
   "quote": "The complexities in the above discussion suggest, however, that U.S. courts have a limited capacity to integrate choice of law into a post-Morrison regime defining transaction location.",
   "citation": "Wulf A. Kaal, Richard W. Painter, Forum Competition and Choice of Law Competition in Securities Law after Morrison v. National Austral (2012). SSRN: https://ssrn.com/abstract=2029983"
  },
  {
   "id": "kaal:claim:2273857-054",
   "url": "https://wulfkaal.github.io/claims/2273857-054",
   "claim": "Financial rulemaking often relies on centralized rather than decentralized information, which is a further defect of the existing framework.",
   "specific_name": "centralized information reliance",
   "conditions": [],
   "source": "Dynamic Regulation of the Financial Services Industry",
   "year": "2013",
   "quote": "Financial rulemaking also often utilizes centralized rather than decentralized information.",
   "citation": "Wulf A. Kaal, Dynamic Regulation of the Financial Services Industry (2013). SSRN: https://ssrn.com/abstract=2273857"
  },
  {
   "id": "kaal:claim:2273857-061",
   "url": "https://wulfkaal.github.io/claims/2273857-061",
   "claim": "Prosecutors negotiating deferred prosecution agreements may lack the expertise needed to negotiate high level corporate governance changes such as personnel changes and internal corporate and compliance procedures.",
   "specific_name": "prosecutorial expertise gap",
   "conditions": [
    "deferred prosecution agreements negotiated by prosecutors"
   ],
   "source": "Dynamic Regulation of the Financial Services Industry",
   "year": "2013",
   "quote": "While prosecutors may not have the necessary expertise to negotiate high level corporate governance changes, such as personnel changes and internal corporate and compliance procedures",
   "citation": "Wulf A. Kaal, Dynamic Regulation of the Financial Services Industry (2013). SSRN: https://ssrn.com/abstract=2273857"
  },
  {
   "id": "kaal:claim:2348463-037",
   "url": "https://wulfkaal.github.io/claims/2348463-037",
   "claim": "Bankruptcy judges and the parties to a bankruptcy case may be unable to adequately evaluate Form PF data pertaining to a creditor, which limits the usefulness of that data in bankruptcy.",
   "specific_name": "evaluative capacity gap for systemic risk data",
   "conditions": [
    "Form PF data as currently structured",
    "SEC and FSOC themselves have not established how to evaluate the data"
   ],
   "source": "Hedge Funds’ Systemic Risk Disclosures in Bankruptcy",
   "year": "2013",
   "quote": "Bankruptcy judges and/or the respective parties in a bankruptcy case may be unable to adequately evaluate Form PF data pertaining to a creditor in a bankruptcy case.",
   "citation": "Wulf A. Kaal, Hedge Funds’ Systemic Risk Disclosures in Bankruptcy (2013). SSRN: https://ssrn.com/abstract=2348463"
  },
  {
   "id": "kaal:claim:2748096-015",
   "url": "https://wulfkaal.github.io/claims/2748096-015",
   "claim": "Pre-crisis regulatory attention was misallocated: although Bernanke identified failure to manage counterparty risk as the primary cause for concern, the SEC and the Senate Banking Committee concentrated on hedge fund transparency instead.",
   "specific_name": "misdirected regulatory focus",
   "conditions": [
    "U.S. regulatory response between the 1998 LTCM failure and the 2007-2008 crisis"
   ],
   "source": "Hedge Funds and Systemic Risk",
   "year": "2016",
   "quote": "The focus of both of these entities, however, centers more on the issue of hedge fund transparency than on counterparty risk.",
   "citation": "Wulf A. Kaal, Timothy A. Krause, Hedge Funds and Systemic Risk (2016). SSRN: https://ssrn.com/abstract=2748096"
  },
  {
   "id": "kaal:claim:2808132-012",
   "url": "https://wulfkaal.github.io/claims/2808132-012",
   "claim": "The political system is less likely to be able to resolve the challenges of disruptive innovation because the increasing complexity of innovation-driven regulatory issues causes confusion among political and policy makers about rapidly emerging change.",
   "specific_name": "Political complexity paralysis",
   "conditions": [
    "rapidly emerging and technically complex disruptive change"
   ],
   "source": "How to Regulate Disruptive Innovation - From Facts to Data",
   "year": "2016",
   "quote": "political system is, however, less likely to be able to deal with the challenges of disruptive innovation because the increasing complexity of innovation-driven regulatory issues causes political and policy makers' confusion over rapidly-emerging disruptive",
   "citation": "Wulf A. Kaal, Erik P.M. Vermeulen, How to Regulate Disruptive Innovation - From Facts to Data (2016). SSRN: https://ssrn.com/abstract=2808132"
  },
  {
   "id": "kaal:claim:2808132-047",
   "url": "https://wulfkaal.github.io/claims/2808132-047",
   "claim": "Even if regulators could obtain the depth of information needed for anticipatory rulemaking, acting on venture capital signals risks wasting scarce regulatory resources, because venture capital funds make many investments that do not succeed and companies still incubating may raise no clear regulatory issues.",
   "specific_name": "False positive regulatory resource waste",
   "conditions": [
    "anticipatory regulatory action based on venture capital data alone",
    "portfolio companies still in incubation"
   ],
   "source": "How to Regulate Disruptive Innovation - From Facts to Data",
   "year": "2016",
   "quote": "anticipatory rulemaking, there may be risk of waste of scarce regulatory resources because VC funds make many investments, not all of which turn out to be successful. Moreover, if companies that received VC financing are still incubating, it may be largely",
   "citation": "Wulf A. Kaal, Erik P.M. Vermeulen, How to Regulate Disruptive Innovation - From Facts to Data (2016). SSRN: https://ssrn.com/abstract=2808132"
  },
  {
   "id": "kaal:claim:2808132-049",
   "url": "https://wulfkaal.github.io/claims/2808132-049",
   "claim": "No regulatory processes or data evaluation capabilities currently exist that could carry out the cross-validated analyses and support the anticipatory regulatory action the authors propose.",
   "specific_name": "Absent institutional capacity for data-driven anticipation",
   "conditions": [
    "as of 2016 in the United States regulatory system"
   ],
   "source": "How to Regulate Disruptive Innovation - From Facts to Data",
   "year": "2016",
   "quote": "and triangulation. Currently no regulatory processes and data evaluation exist that could facilitate such analyses and anticipatory regulatory action.",
   "citation": "Wulf A. Kaal, Erik P.M. Vermeulen, How to Regulate Disruptive Innovation - From Facts to Data (2016). SSRN: https://ssrn.com/abstract=2808132"
  },
  {
   "id": "kaal:claim:2740477-011",
   "url": "https://wulfkaal.github.io/claims/2740477-011",
   "claim": "The rising complexity of innovation driven regulatory issues confuses political and policy makers about rapidly emerging disruptive change, which makes a coherent political and policy solution to those challenges less likely.",
   "specific_name": "Political confusion under complexity",
   "conditions": [
    "rapidly emerging and complex disruptive change"
   ],
   "source": "Venture Capital as Dynamic Regulation of Disruptive Innovation",
   "year": "2016",
   "quote": "the increasing complexity of innovation-driven regulatory issues causes political and policy makers' confusion over rapidly-emerging disruptive change, making a coherent political and policy solution to these challenges less likely.",
   "citation": "Wulf A. Kaal, Erik P.M. Vermeulen, Venture Capital as Dynamic Regulation of Disruptive Innovation (2016). SSRN: https://ssrn.com/abstract=2740477"
  },
  {
   "id": "kaal:claim:2992962-034",
   "url": "https://wulfkaal.github.io/claims/2992962-034",
   "claim": "Without judge expertise in the subject matter of a smart contract dispute, user confidence in effective and fair conflict resolution is undermined, which reduces confidence in crypto transactions as a whole and can undermine the evolution of the crypto economy.",
   "specific_name": "arbiter-expertise-deficit",
   "conditions": [
    "dispute resolution systems that select judges at random from all users, such as Aragon"
   ],
   "source": "Crypto Transaction Dispute Resolution",
   "year": "2017",
   "quote": "Without judge's expertise in a given smart contract subject matter of a dispute user confidence in effective and fair conflict resolution is undermined which leads to overall less confidence in crypto transactions as a whole and can undermine the evolution of the crypto economy.",
   "citation": "Wulf A. Kaal, Craig Calcaterra, Crypto Transaction Dispute Resolution (2017). SSRN: https://ssrn.com/abstract=2992962"
  },
  {
   "id": "kaal:claim:2957645-019",
   "url": "https://wulfkaal.github.io/claims/2957645-019",
   "claim": "Regulators are often unable to supervise financial institutions effectively because of insufficient public funding, and contingent capital securities could help fill the void that this supervisory incapacity leaves.",
   "specific_name": "Underfunded supervision leaves a monitoring void",
   "conditions": [
    "supervisory agencies operating under funding constraints"
   ],
   "source": "Dynamic Regulation via Contingent Capital",
   "year": "2017",
   "quote": "Given this potential, CCSs could help fill a void left by regulators' inability to supervise financial institutions effectively, often the result of insufficient public funding.",
   "citation": "Kaal, Dynamic Regulation via Contingent Capital (2017). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2957645"
  },
  {
   "id": "kaal:claim:2939127-033",
   "url": "https://wulfkaal.github.io/claims/2939127-033",
   "claim": "Exponentially increasing disruptive innovation will lead clients to routinely bring legal professionals problems that those lawyers cannot fully understand, inside a legal framework that does not always supply clear or helpful answers.",
   "specific_name": "advice-beyond-lawyer-competence",
   "conditions": [
    "worldwide acceleration of disruptive innovation"
   ],
   "source": "Legal Education in the Blockchain Revolution",
   "year": "2017",
   "quote": "The exponentially increasing disruptive innovation worldwide will cause clients to frequently ask legal professionals to deal with issues lawyers cannot fully understand, within a legal framework that does not always offer clear or helpful answers.",
   "citation": "Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Legal Education in the Blockchain Revolution (2017). SSRN: https://ssrn.com/abstract=2939127"
  },
  {
   "id": "kaal:claim:3411110-021",
   "url": "https://wulfkaal.github.io/claims/3411110-021",
   "claim": "Regulators' relative unsophistication about the technology is itself a risk driver, because a poorly informed regulator is likely to over-react and precipitate new or expanded regulation.",
   "specific_name": "regulator over-reaction from unsophistication",
   "conditions": [
    "regulators lacking technical understanding of blockchain"
   ],
   "source": "Blockchain-Based Securities Offerings",
   "year": "2019",
   "quote": "The relative unsophistication of the regulators and the lack of regulators' understanding of the technology could result in an over-reaction which in turn can precipitate creating new / expanding existing regulations.",
   "citation": "Wulf A. Kaal, Samuel Evans, Blockchain-Based Securities Offerings (2019). SSRN: https://ssrn.com/abstract=3411110"
  },
  {
   "id": "kaal:claim:3405660-004",
   "url": "https://wulfkaal.github.io/claims/3405660-004",
   "claim": "Neither national nor international regulators have the resources to fully investigate or regulate hedge fund activity, and the industry actively lobbies to preserve the resulting information asymmetries.",
   "specific_name": "regulatory resource shortfall",
   "conditions": [],
   "source": "Indirect Regulation of Hedge Funds",
   "year": "2019",
   "quote": "National and international regulators do not have the resources to fully investigate or regulate the activities of hedge funds. Hedge funds are lobbying to preserve information asymmetries as far as possible and avoid enhanced transparency.",
   "citation": "Kaal, Indirect Regulation of Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3405660"
  },
  {
   "id": "kaal:claim:3405660-017",
   "url": "https://wulfkaal.github.io/claims/3405660-017",
   "claim": "There is currently no precise formula for devising effective integrated prudential hedge fund regulation, so the prudential model remains underspecified.",
   "specific_name": "prudential model underspecification",
   "conditions": [],
   "source": "Indirect Regulation of Hedge Funds",
   "year": "2019",
   "quote": "Currently, no precise formula exist for devising effective integrated prudential hedge fund regulation.",
   "citation": "Kaal, Indirect Regulation of Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3405660"
  },
  {
   "id": "kaal:claim:3405660-018",
   "url": "https://wulfkaal.github.io/claims/3405660-018",
   "claim": "The complex trading, investing and corporate structures of active international hedge funds are a major constraint on effective prudential supervision.",
   "specific_name": "structural opacity constraint",
   "conditions": [
    "internationally active hedge funds with complex group structures"
   ],
   "source": "Indirect Regulation of Hedge Funds",
   "year": "2019",
   "quote": "One of the major constraining factors that constricts effective prudential supervision of hedge funds is the complex trading-, investing- and corporate structure of active international hedge funds.",
   "citation": "Kaal, Indirect Regulation of Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3405660"
  },
  {
   "id": "kaal:claim:3405660-023",
   "url": "https://wulfkaal.github.io/claims/3405660-023",
   "claim": "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.",
   "specific_name": "unreliable counterparty risk assessment",
   "conditions": [
    "banks face opaque hedge fund counterparties"
   ],
   "source": "Indirect Regulation of Hedge Funds",
   "year": "2019",
   "quote": "Regulators who regulate banks' risk management processes are in essence asking banks to fully assess the risks they incur in engaging with hedge funds as their counterparties. That assessment is often dubious at best.",
   "citation": "Kaal, Indirect Regulation of Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3405660"
  },
  {
   "id": "kaal:claim:3405660-025",
   "url": "https://wulfkaal.github.io/claims/3405660-025",
   "claim": "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.",
   "specific_name": "creditor competition erosion",
   "conditions": [
    "multiple banks competing to lend to the same hedge funds"
   ],
   "source": "Indirect Regulation of Hedge Funds",
   "year": "2019",
   "quote": "Competition among creditor banks can also lead to compromising on important elements of the risk management process and agreeing to overly generous credit conditions.",
   "citation": "Kaal, Indirect Regulation of Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3405660"
  },
  {
   "id": "kaal:claim:3936876-032",
   "url": "https://wulfkaal.github.io/claims/3936876-032",
   "claim": "Externally led auditing of digital asset reserves among custodial service providers is declining, falling 24 percentage points relative to the 2018 sample.",
   "specific_name": "declining reserve audit coverage",
   "conditions": [
    "surveyed custodial service providers, 2020 benchmarking study"
   ],
   "source": "Custody of Digital Assets",
   "year": "2021",
   "quote": "The report noted this is a 24-percentage point decline compared to their 2018 sample.",
   "citation": "Wulf A. Kaal, Hayley Howe, Custody of Digital Assets (2021). SSRN: https://ssrn.com/abstract=3936876"
  },
  {
   "id": "kaal:claim:3995709-004",
   "url": "https://wulfkaal.github.io/claims/3995709-004",
   "claim": "Code review effectiveness is undermined by heavier review loads, because reviewers with longer review queues become overwhelmed and are more likely to submit poor quality code evaluations.",
   "specific_name": "reviewer overload from long queues",
   "conditions": [
    "reviewers carrying long review queues"
   ],
   "source": "How DAOs Optimize Open-Source Code Reviews and Create Open-Source Standards",
   "year": "2021",
   "quote": "another study found that code reviewers with longer review queues tend to get overwhelmed and are more likely to submit poor-quality code evaluations.22 Therefore, modern code review effectiveness is undermined by heavier review loads.",
   "citation": "Wulf A. Kaal, How DAOs Optimize Open-Source Code Reviews and Create Open-Source Standards (2021). SSRN: https://ssrn.com/abstract=3995709"
  },
  {
   "id": "kaal:claim:3981021-009",
   "url": "https://wulfkaal.github.io/claims/3981021-009",
   "claim": "The default regulatory remedy is impaired at the source: the IRS division charged with monitoring charities remains understaffed and underfinanced and is able to audit only a small percentage of charities annually.",
   "specific_name": "Under-resourced charity regulator",
   "conditions": [
    "United States charity oversight",
    "IRS exempt organizations enforcement"
   ],
   "source": "How Decentralized Autonomous Organizations Optimize Charitable Giving",
   "year": "2021",
   "quote": "For example, the IRS division charged with monitoring charities remains understaffed and underfinanced and is only able to audit a small percentage of charities annually.",
   "citation": "Wulf A. Kaal, How Decentralized Autonomous Organizations Optimize Charitable Giving (2021). SSRN: https://ssrn.com/abstract=3981021"
  },
  {
   "id": "kaal:claim:3981021-010",
   "url": "https://wulfkaal.github.io/claims/3981021-010",
   "claim": "Information sharing remedies are self limiting: the Pension Protection Act of 2006 let the IRS share more charity tax record information with state officials so they could investigate possible violations of state law, but the same act established strict controls over how that information could be used.",
   "specific_name": "Constrained information sharing between regulators",
   "conditions": [
    "United States federal to state charity enforcement coordination"
   ],
   "source": "How Decentralized Autonomous Organizations Optimize Charitable Giving",
   "year": "2021",
   "quote": "Pension Protection Act of 2006 allowed the IRS to share more information from charity tax records with state officials so they could investigate possible violations of state law. However, the act also established strict controls over how such information could be used;",
   "citation": "Wulf A. Kaal, How Decentralized Autonomous Organizations Optimize Charitable Giving (2021). SSRN: https://ssrn.com/abstract=3981021"
  },
  {
   "id": "kaal:claim:4796714-020",
   "url": "https://wulfkaal.github.io/claims/4796714-020",
   "claim": "The gap between regulators' technical understanding and the state of the art in AI drives rules to one of two failure states: too vague to be enforceable, or so prescriptive that they suppress creative and beneficial uses of AI.",
   "specific_name": "regulator expertise gap",
   "conditions": [
    "applies where regulators lack current technical expertise",
    "holds for fast moving technical domains"
   ],
   "source": "AI Governance",
   "year": "2024",
   "quote": "There is often a gap between the regulators' technical understanding and the state of the art in AI technology. This gap can lead to regulations that are either too vague to be enforceable or overly prescriptive, stifling creative and beneficial uses of AI.",
   "citation": "Wulf A. Kaal, AI Governance (2024). SSRN: https://ssrn.com/abstract=4796714"
  },
  {
   "id": "kaal:claim:4900878-018",
   "url": "https://wulfkaal.github.io/claims/4900878-018",
   "claim": "Quantum based policies and regulations stall at implementation because the complexity and counterintuitive character of quantum concepts make them hard for policymakers and decision makers to apply, so the framework needs more accessible and intuitive formulations before it can guide policy.",
   "specific_name": "policy-implementation-gap",
   "conditions": [
    "real world policy and regulatory contexts"
   ],
   "source": "Quantum Economy and Tokenomics",
   "year": "2024",
   "quote": "The complexity and counterintuitive nature of quantum concepts may make it difficult for policymakers and decision-makers to effectively apply quantum economics principles in practice.",
   "citation": "Wulf A. Kaal, Quantum Economy and Tokenomics (2024). SSRN: https://ssrn.com/abstract=4900878"
  },
  {
   "id": "kaal:claim:4957318-009",
   "url": "https://wulfkaal.github.io/claims/4957318-009",
   "claim": "Sunset regulation has fallen out of wide use, and the author attributes this primarily to the administrative burden and political inertia of regularly reviewing and repealing laws, not to any defect in the concept itself.",
   "specific_name": "sunset-review-burden",
   "conditions": [
    "legislatures without dedicated review capacity"
   ],
   "source": "The Future of Law - Dynamic Web3 Governance",
   "year": "2024",
   "quote": "Sunset regulations, which involve the removal of outdated or less relevant legal provisions over time, are no longer widely used due to several factors. Primarily, the administrative burden and political inertia associated with regularly reviewing and repealing such laws discourage these practices.",
   "citation": "Wulf A. Kaal, The Future of Law - Dynamic Web3 Governance (2024). SSRN: https://ssrn.com/abstract=4957318"
  },
  {
   "id": "kaal:claim:4957318-021",
   "url": "https://wulfkaal.github.io/claims/4957318-021",
   "claim": "The cost of comprehensive legal review deters governments from committing the necessary resources, which prevents legal garbage collection from being applied consistently and effectively.",
   "specific_name": "review-cost-deterrence",
   "conditions": [
    "jurisdictions with budget constraints or competing policy priorities"
   ],
   "source": "The Future of Law - Dynamic Web3 Governance",
   "year": "2024",
   "quote": "The high costs associated with these processes can deter governments from committing the necessary resources, thereby hindering the consistent and effective application of legal garbage collection initiatives.",
   "citation": "Wulf A. Kaal, The Future of Law - Dynamic Web3 Governance (2024). SSRN: https://ssrn.com/abstract=4957318"
  },
  {
   "id": "kaal:claim:5245185-001",
   "url": "https://wulfkaal.github.io/claims/5245185-001",
   "claim": "Traditional centralized AI driven supervision of AI agent transactions is deficient because it delivers only limited transparency, is susceptible to bias, and concentrates risk in single points of failure.",
   "specific_name": "centralized-supervision-deficiency",
   "conditions": [
    "centralized supervision of autonomous AI agent transaction execution"
   ],
   "source": "How can we Best Monitor AI Agents",
   "year": "2025",
   "quote": "Traditional, centralized AI-driven supervision methods are often hindered by limited transparency, susceptibility to bias, and the risk of single points of failure.",
   "citation": "Wulf A. Kaal, How can we Best Monitor AI Agents (2025). SSRN: https://ssrn.com/abstract=5245185"
  },
  {
   "id": "kaal:claim:5245185-006",
   "url": "https://wulfkaal.github.io/claims/5245185-006",
   "claim": "The decentralized architecture of blockchain itself complicates accountability by rendering oversight across distributed networks opaque, and that opacity jeopardizes adequate regulatory supervision of AI agents.",
   "specific_name": "distributed-oversight-opacity",
   "conditions": [
    "AI agents operating across distributed blockchain networks"
   ],
   "source": "How can we Best Monitor AI Agents",
   "year": "2025",
   "quote": "The decentralized nature of blockchain complicates accountability, rendering oversight across distributed networks opaque.42 This opacity jeopardizes adequate regulatory supervision of AI agents.",
   "citation": "Wulf A. Kaal, How can we Best Monitor AI Agents (2025). SSRN: https://ssrn.com/abstract=5245185"
  },
  {
   "id": "kaal:claim:5245185-017",
   "url": "https://wulfkaal.github.io/claims/5245185-017",
   "claim": "Reliance on compliance analytics providers overlooks their scalability limits in monitoring vast decentralized transaction volumes and their inability to adapt to jurisdictional regulatory disparities.",
   "specific_name": "compliance-analytics-scale-gap",
   "conditions": [
    "blockchain analytics firms applied to AI agent transactions",
    "multi jurisdictional regulation"
   ],
   "source": "How can we Best Monitor AI Agents",
   "year": "2025",
   "quote": "The reliance on compliance tools, such as those from Chainalysis, overlooks their scalability challenges in monitoring vast, decentralized transaction volumes and adaptability to jurisdictional regulatory disparities.",
   "citation": "Wulf A. Kaal, How can we Best Monitor AI Agents (2025). SSRN: https://ssrn.com/abstract=5245185"
  }
 ]
}