Employment derivatives: Difference between revisions
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For these contingencies the employment rate swap was a natural hedge. While wide-scale redundancies and hiring freezes gripped the fintech sector, the boring old banking industry would box on as it always had. A fintech short ''[[π]]'' under an [[Employment rate swap|ERS]] would have a decent cashflow coming in to keep the lights on. | For these contingencies the employment rate swap was a natural hedge. While wide-scale redundancies and hiring freezes gripped the fintech sector, the boring old banking industry would box on as it always had. A fintech short ''[[π]]'' under an [[Employment rate swap|ERS]] would have a decent cashflow coming in to keep the lights on. | ||
====The | ====The “PIBOR” submission process==== | ||
{{Drop|I|t was easy}} enough to quantify a bank’s wage bill since, once you controlled it for hysteria, it was more or less fixed. But what about the ever-changing hypothetical wage bill of a startup? How to gauge that in real-time? What was to stop a startup gaming the rate by pretending its preparedness to pay stupid money was lower than it really was? | {{Drop|I|t was easy}} enough to quantify a bank’s wage bill since, once you controlled it for hysteria, it was more or less fixed. But what about the ever-changing hypothetical wage bill of a startup? How to gauge that in real-time? What was to stop a startup gaming the rate by pretending its preparedness to pay stupid money was lower than it really was? | ||