Employment derivatives: Difference between revisions

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.   

{{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?