Banker bot handles credit risk

Zero Hedge is commenting on the default rate at :ending Club, and notes:

In other words, the algorithms LendingClub uses to assess credit risk aren't working. Plain and simple. 

“Their business is to take data and use that to underwrite risk,” the aforementioned Michael Tarkan told Bloomberg by phone. “If you’re an investor in the loans on the platform, this creates a concern around that underwriting model.”

It sure does, as does common sense. Matching up individual borrowers and lenders may sound like a good idea in principle, but effectively, you've got a brand new set of companies (the P2Ps) attempting to assess individual borrowers' credit risk on the fly in cyberspace, an absurdly difficult proposition and one that obviously comes with myriad risks especially when those credits are sliced up and sold to investors. 

OK, the bot is honest, and when its owner signs up using the smart card, then you allow the bot to report a representative sample of your inventory balances. You have agreed to share your belief function, and it is transferred such that human tampering is impossible.  Then match that to your banker yield curve, and get the optimum risk sharing.  No problem, that is why its called pure cash.