Use of illiquid assets increased risk while seemed to dampen it.
Incentives, Complexity, and the Blame Game � naked capitalism: "And too much risk is a no-no too, but the measurement of risk was volatility of returns. So what did we see in the crisis just past? A rise in popularity of strategies that used illiquid assets….which were therefore marked to model…which therefore did not show much (any) price volatility until their credit quality decayed."
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