He draws an analogy with the boom in structured finance, which saw banks distribute risk to specialist vehicles like conduits.
An innovative business model generates electricity and a new way to distribute risk from thin air.
Prosper handles loans of up to $25,000 (the average funded loan is $5,000), broken into smaller loans to distribute risk.
Prosper breaks the loan up into multiple pieces to distribute risk, and then funds from the lenders offering the most attractive interest rates.
This knowledge helps to prescribe decision-making on whether and when to move herds to better pasture, introduce fire or split the herds to distribute risk.
If it were not for the financial system’s ability to distribute risk, we would never undertake the large and complex projects required to sustain life as we know it.
Inherently forward looking, ACFs encompass mitigation and adaptation options to respond to scenarios of projected future biophysical, social-economic, and policy conditions which distribute risk and provide diversity of response to uncertainty.
Some people might say Wall Street only helped to distribute risk.
Market mechanisms were supposed to distribute risk so well that even those who were reckless would never see the consequences of their actions.
Unlike formal forms of exchange, however, family transfers cannot be perfectly enforced; while transfers can distribute risk, they can also create it (Foster and Rosenzweig 2001).
