Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
In your scheme, other members become less able to trade after a default.

The default affects the existing 'stock' of Baby Hours and means - if the Pool is inadequate - that those with positive balances have smaller balances, while those with negative balances now have greater negative balances. It affects the ability of members to create new Baby Hour credits after the default only insofar as a member's debit balance gets nearer his limit.

The members of the scheme all share the default costs caused by a rogue member. I wouldn't really characterise that as punishment, though. I would call it solidarity, or maybe a form of mutual insurance. Naturally it is necessary to set limits in relation to positive and negative balances.....that is a quasi - Monetary Authority policy question for the membership.

Those members who run relatively low or zero balances receive a dividend via the Pool from those other members who are using the mutual guarantee, and which is essentially a payment in respect of their share in the Baby Pool mutual guarantee.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Mon Nov 16th, 2009 at 10:42:48 AM EST
[ Parent ]

Others have rated this comment as follows:


Top Diaries

Occasional Series