August 2, 2010
www.patentedtransparency.com
If there shall be a central exchange for the derivative contracts, then sufficient solvency levels of those parties which are part of that exchange should be confirmed to insure the risk taking is within means to pay, and does not spill over to the taxpayer. Just as a margin department of a Broker-Dealer can block transactions which exceed customer's equity holdings, derivative transactions which are reported electronically and compared to regulatory net capital in real time may be circumvented at the time of transaction if deemed beyond a party's abilty to pay. Excessive Risk is stopped before it happens.