The S/L contract spells out the term difference between deposits and loans. Then the contract specifies one or more valid repurchasers of the loans who offer insurance. The Pit boss is then free to operate a standard S/L, always sloughing off excess notes to the repurchase market. someone else will tell you how an insurance company works here. But this looks like a triple entry accounting system broken into two separate partitions.
The insurance is against the currency banker being snookers, accepting loans for longer terms than the time to completion and productivity innovations front run.
Alternative, as Selgin mentions, bank closures are seldom for very long. The S/L contract can specify a bank closing function when term loans are imbalanced. Then the pit boss works the insurance problem on the run in open contract.
Any fiat can run almost all these pits using existing Solidify or Viper. Basically run investment platform, guaranteed compliant in the local fiat. The fiat ledger system of correspondent banks work really well in all of this.
The sandbox term for the insurance function seems to be Oracle in the current algorithms. I like it, but it is insurance, its current liquidity always has a deviation from the pits, and is higher. Traders pay a price for that.
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