Before revision:  We show that the immediate cause of the increase in extreme risks in our model is the risk control policy of the banks : A prudent bank makes itself locally safer by putting a limit to leverage, so when a fund exceeds its leverage limit, it must partially repay its loan by selling the asset.
After revision:  Here instead this comes from the fact that leverage limits cause funds to sell into a falling market : A prudent bank makes itself locally safer by putting a limit to leverage, so when a fund exceeds its leverage limit, it must partially repay its loan by selling the asset.