Regulators fret equity ratios, how much ownership skin is in the game with respect to balance sheet size. More equity, more eyes on safe investing, in short.
But what if portfolios are rebalanced, to the specified risk level, automatically, What if this is done for all portfolios? What if all portfolios could trade, collectively, under fair and closed transaction rules? What if we did this with very low transaction costs,less than a quarter point?
In that case, investment houses are bots, and bots mark to market at the relaxation time of the bot network, days. Human economics remains the same, but counting things could never be more accurate.
The ongoing price discovery in the bot collective is gold, you can put it in your pocket.
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