Home » Articles » Hedge Fund Regulation via Basel III

Hedge Fund Regulation via Basel III

PDF · Wulf A. Kaal · Jun-27-2012 · 44 VAND. J. TRANSNAT'L L. 389 (2011)

This Article is a rejoinder to a recent comment by Professor Romano on an earlier paper I coauthored with Christian Kirchner.  Professor Romano suggests regulatory arbitrage, rather than the targeted regulation of bank lending to hedge funds under Basel III, as a hedge against systemic failure.  I contend that it was not harmonization through Basel II but rather the profitability of certain assets and business strategies that caused banks to hold similar assets and engage in similar strategies.  In particular, I find that the increasing role of hedge funds in the credit derivatives market, in combination with the market’s recent failure, suggests that an increased emphasis on banks’ lending exposure to hedge funds could be justified.  Using the methodological approach of New Institutional Economics, I evaluate recent regulatory changes, including the U.S. Dodd–Frank Act, the AIFM Directive, and other pertinent regulation.  I provide an impact analysis of regulatory changes, de lege lata and de lege ferenda, with a special emphasis on, and historical analysis of, hedge fund registration rules and asymmetric regulation in Dodd–Frank and the AIFM Directive.




Leave a Reply

ExpressO Top 10 Law Review

ANNOUNCEMENTS

Please join us in congratulating the Vanderbilt Journal of Transnational Law 2014-2015 Annual Award Winners.

Read the Journal’s latest issue (Vol. 48 No. 1) here.

Video is now available from the Vanderbilt Journal of Transnational Law‘s latest symposium, This is Not a Drill: Confronting Legal Issues in the Wake of International Disasters. Watch them here.

We are pleased to announce the 2015-2016 Board of Editors.

The Vanderbilt Journal of Transnational Law mourns the death of its founder, Professor Harold G. Maier.

Explore Other Vanderbilt Law Resources