Tag Archives: jpmorgan

How Amazon Could Disrupt Care (Part 3)

In Part 2 of this series, I explored how the innovations that Amazon popularized in retail would be transformative if applied to health care at scale.

The potential value of such innovations is not lost on those inside the healthcare sector. Many startups and large healthcare organizations are already working hard to adapt and adopt them. (See, for example, my articles on diabetes preventionBoomers and how to shape the future of connected health). Here are some of the advantages that Amazon brings to this challenge.

Amazon can start with a clean sheet of paper. Unlike those inside the current healthcare system, Amazon doesn’t have existing customers to placate, legacy systems to update or business models to protect. A fundamental disconnect in healthcare is that the patient is not the customer, so helping customers doesn’t necessarily benefit patients (or vice versa). In this case, Amazon and its partners are the customers. And, because the potential patients are employees, Amazon can leverage strong existing connections, relationships and overlapping interests.

See also: 10 Mistakes Amazon Must Avoid in Health  

Amazon brings differentiated capabilities and experience. While many talented people in healthcare are working on the same capabilities, few can match Amazon’s technical expertise and practical experience. Amazon’s expertise in social networking, mobile devices, user experience, the Internet of Things and artificial intelligence are extremely relevant to healthcare. Its existing platforms, like its Alexa-enabled devices and AWS cloud platform, will, no doubt, also come into play.

Amazon doesn’t have to make money. Innovators in healthcare have to worry about revenues and reimbursement, usually from insurance. With deep pockets and the potential to recoup cost through savings, Amazon has great flexibility to experiment without such concerns. Indeed, the alliance declared itself to be “free from profit-making incentives and constraints.”

While its initial focus is on reducing cost and improving satisfaction for its 1.2 million employees, the alliance is not shy about wanting to create solutions relevant to all Americans. Doing so would serve two other incentives for Amazon to think big about its healthcare innovation.

Healthcare could enable synergies with Amazon’s other businesses. As I’ve previously observed, Amazon approaches competition as a no-holds-barred battle for tighter customer relationships and ever-larger share of customer wallets. It is hard to find a bigger untapped market category than healthcare through which to grow Prime membership. In addition, because mobile devices, AI and cloud-based platforms and services have become synonymous with the future of healthcare, it is likely that Amazon can find business synergies in those areas, as well.

There is a massive $3.2 trillion healthcare market to enter. Industry valuations tremble at the whisper of Amazon’s interest in healthcare for a good reason, as has happened to pharmacies, benefit managers and health insurers. That’s because investors know that there are deep pockets of inefficiencies and unnecessary complexity in healthcare that, in turn, offer real market opportunities for Amazon. For example, one analyst estimates that just pharmacy benefits management (PBM) business is a $25 billion to $50 billion market opportunity. Amazon had already been rumored to be building an internal PBM capability for its employees. Adding Berkshire Hathaway and JPMorgan employees into that mix would be another step closer to launching a market-facing business.

See also: Media Coverage on Amazon Misses Point  

Forbes.com contributor Dan Munro is pessimistic. He describes the overall effort as an exercise in “Fantasy Health Care.” At the heart of the problem, he writes, are big systemic flaws that the alliance cannot address. What’s more, Munro argues that the alliance “is not remotely novel or innovative, and the historical evidence is clear that it certainly won’t disrupt health care.”

Rather than partaking in a fantasy, I think Jeff Bezos offered a cleared-eye view of the challenge in the alliance announcement:

The health care system is complex, and we enter into this challenge open-eyed about the degree of difficulty. Hard as it might be, reducing healthcare’s burden on the economy while improving outcomes for employees and their families would be worth the effort. Success is going to require talented experts, a beginner’s mind and a long-term orientation.

For my part, I’ll take an optimistic point of view. The problem is big and hairy, and I applaud the audacious effort to take it on.  Let’s remember: Innovation is always hard and more often than not fails—and that’s why the rewards are great for those with the audacity to try and the chops to succeed.

Whiff of Market-Based Healthcare Change?

Tuesday’s announcement about AmazonBerkshire Hathaway and JPMorgan (A/BH/JPM) was short on details. The three mega-firms will form an independent company that develops solutions, first, for their own companies’ health plans and then, almost certainly, for the larger health care marketplace. But the news reverberated throughout the healthcare industry as thoroughly as any in recent memory.

Healthcare organizations were shaken. Bloomberg Markets reported that:

Pharmacy-benefit manager Express Scripts Holding Co. fell as much as 11 percent, the most intraday since April, at the open of U.S. trading Tuesday, while rival CVS Health Corp. dropped as much as 6.4 percent. Health insurers also fell, with Anthem Inc. losing as much as 6.5 percent and Aetna, which is being bought by CVS, sliding as much as 4.3 percent.

As expected, these firms’ stock prices rebounded the next day. But you could interpret the drops as reflections of the perceived fragility of healthcare companies’ dominance and traders’ confidence in the potential power of Amazon’s newly announced entity. Legacy healthcare firms, with their well-earned reputations for relentlessly opaque arrangements and egregious pricing, are vulnerable, especially to proven disruptors who believe that taming healthcare’s excesses is achievable. Meanwhile, many Americans have come to believe in Amazon’s ability to deliver.

Those who buy healthcare for employers and unions probably quietly rejoiced at the announcement. For them, the prospect of a group that might actually transform healthcare would be a breath of fresh air. In my experience, at least, the CFOs and benefits managers at employers and unions are acutely aware that they’re being taken advantage of by every healthcare industry sector. They’re genuinely weary, and they’d welcome a solid alternative.

See also: The Dawn of Digital Reinsurance  

Their healthcare intentions notwithstanding, the A/BH/JPM group is formidable, representing immense strength and competence. Amazon is an unstoppably proven serial industry innovator, continuing to consolidate its position in the U.S. and in key markets globally. Berkshire Hathaway harbors significant financial strength and a stop-loss unitU.S. Medical Stop Loss, fluent in underwriting healthcare risk, which should be handy. In addition to the fact that JPMorgan is the nation’s largest bank, with assets worth nearly $2.5 trillion in 2016, it has a massive list of prospective buyers in its commercial client base.

This triumvirate knows that, in healthcare, they have an advantage. There are proven but mostly untapped approaches in the market that effectively manage healthcare clinical, financial and administrative risk, consistently delivering better health outcomes at significantly lower cost. In the main, legacy healthcare organizations have ignored these solutions, because efficiencies would compromise their financial positions.

To put this into perspective, consider that, since early 2009, when the Affordable Care Act was passed, the stock prices of the major health plans have grown a spectacular 5.3 to 9.6 times — in aggregate, 3.7 times as fast as the S&P 500 and 3.2 times as fast as the Dow Jones Industrial Average.

At the end of the day under current fee-for-service arrangements, healthcare’s legacy organizations make more and have rising value if healthcare costs more. If they take advantage of readily available solutions that make healthcare better and cost less, earnings, stock price and market capitalization will all tumble. They’re in a box.

What little we know about Amazon’s intentions indicates that they are ambitious. Presumably, they’ll begin by bringing technology tools to bear. That could cover a lot of territory, but assembling and integrating high-value narrow networks by identifying the performance of different healthcare product/service providers seems like a doable and powerful place to begin. High-performance vendors exist in a broad swath of high-value niches. Arranging these risk management modules under a single organizational umbrella can easily result in superior outcomes at dramatically less cost than current health care spending provides.

Amazon has developed a relationship with industry-leading pharmacy benefits manager (PBM) Express Scripts (ESI), likely to operationalize mail order and facility-based pharmacies. Given ESI’s history of opacity and hall-of-mirrors transactions – approaches that are directly counter to Amazon’s ethos – it’s tempting to imagine that that relationship is a placeholder until Amazon can devise or identify a more value-based model.

Also, a couple weeks ago, Amazon hired Martin Levine, MD, a geriatrician who had run the Seattle clinics for Boston-based Medicare primary care clinic firm Iora Health. This could suggest that Amazon aspires to deliver clinical services, likely through both telehealth and brick-and-mortar facilities.

All this said, we should expect the unexpected. The A/BH/JPM announcement wasn’t rushed, but the result of a carefully thought through, methodical planning exercise. As it has done over and over again – think Prime video; two-day, free shipping; and the Echo – it is easy to imagine that Amazon could present us with powerful healthcare innovations that seem perfectly intuitive but weren’t previously on anyone’s radar.

See also: How to Make Smart Devices More Secure

What is most fascinating about this announcement is that it appears to pursue the pragmatic urgency of fixing a serious problem that afflicts every business. At the same time, it may represent an effort to subvert and take control of healthcare’s current structure.

So, while we may be elated that a candidate healthcare solution is raising its head, we should be skeptical of stated good intentions. Warren Buffett’s now-famous comment that ballooning healthcare costs are “a hungry tapeworm on the American economy” rings a little hollow when we realize that Berkshire Hathaway owns nearly one-fifth of the dialysis company Da Vita, a model of hungry health industry tapeworms.

Finally, we should not doubt that this project has aspirations far beyond U.S. health care. The corporatization and distortion of healthcare’s practices is a global problem that will be susceptible to the same solutions of evidence and efficiency everywhere.

All this is promising in the extreme, but there’s also a catch. The U.S. healthcare industry’s excesses undermine our republic and have become a threat to our national economic security. The solutions that this A/BH/JPM project will leverage could become an antidote to the devils we all know plague our country’s healthcare system. That said, we should be mindful that, over the long term, our saviors could become equally or more problematic.

3 Reasons Why Risks Are Mismanaged

ERM can bring great benefits. By managing risk, it helps to minimize loss as well as maximize strategic profitability, optimize opportunities and enhance culture and reputation. Thus, when a loss occurs in a company that has been practicing ERM, the reaction is to be disappointed in ERM as a practice or to blame the ERM leader for faulty execution. It would be unwise, however, to react without further analysis and greater understanding.

No process or person is perfect; there will be times when ERM may fail to live up to expectations. Even with excellent execution, there will be times when a risk is too opaque or too complicated to be identified or managed effectively.

All ERM practitioners must determine how much they can rely on what their colleagues in other functions or business units say about a business situation and how much risk it holds, because there are, at least, three circumstances that might cause a business leader or “expert” to overlook or underestimate a risk. They are:

  1. Reluctance to expose or report a risk, for whatever reason,
  2. Lack of sufficient expertise or experience to recognize a risk or determine its size.
  3. Reliance on imprecise or inadequate standards and models that fail to signal a risk.


It is really not such a mystery why a business leader or staff member might be reluctant to identify a risk. Among the reasons are:

  • Fear of being labeled a naysayer,
  • Fear of derailing an initiative that has favor in the C-Suite, thus becoming persona non grata,
  • Concern that identifying a risk might hurt personal compensation, at least in the short term.

An environment that is rife with these cultural stimuli will never produce transparency in risk identification and mitigation. Factors that can give rise to such an environment include:

  • Senior management who cannot distinguish between a naysayer and someone who is risk-aware and committed,
  • Senior management who have shown themselves to be closed-minded or have “shot the messenger” when presented with an issue,
  • Staff at any level who are not able or willing to consider the long-term health of the organization.

An environment where risk is openly discussed is a prerequisite to being able to manage risk well, but producing such an atmosphere takes time and effort. Much has been written about ERM and culture, and this literature holds great advice about how to build a risk-aware culture.  Among the collected wisdom is:

  • The board and CEO must continuously champion ERM,
  • Risk must be represented in strategy discussions, organizational performance management, various employee communications and individual performance plans,
  • ERM must be given effective resources,
  • The ERM process should be robust and repeatable,
  • Mitigation plans should be closely monitored,
  • Rewards or lack thereof should be determined on the basis of how well risk is managed per plans. 

Lack of Expertise

Less sinister but no less dangerous a situation exists when the presumed experts do not have the knowledge or skill to identify risks within their spheres of responsibility.The person involved could be a business unit leader, a plant manager, a department/function head or a member of the C-Suite.

Consider the testimony given by Jamie Dimon, chairman and CEO of JPMorgan Chase, about the bank’s chief investment office (CIO). His bank lost billions of dollars from a large accumulation of synthetic derivatives tied to credit default swaps that crashed in value. These investments were handled by staff based in London, in a debacle nicknamed “The London Whale.” The following is an excerpt of that testimony before the Committee on Banking, Housing, and Urban Affairs in the U.S. Senate on June 13, 2012:

• “CIO’s strategy for reducing the synthetic credit portfolio was poorly conceived and vetted. The strategy was not carefully analyzed or subjected to rigorous stress testing within CIO and was not reviewed outside CIO.

• “In hindsight, CIO’s traders did not have the requisite understanding of the risks they took. When the positions began to experience losses in March and early April, they incorrectly concluded that those losses were the result of anomalous and temporary market movements, and therefore were likely to reverse themselves.

• “The risk limits for the synthetic credit portfolio should have been specific to the portfolio and much more granular, i.e., only allowing lower limits on each specific risk being taken.

• “Personnel in key control roles in CIO were in transition, and risk control functions were generally ineffective in challenging the judgment of CIO’s trading personnel. Risk committee structures and processes in CIO were not as formal or robust as they should have been.

• “CIO, particularly the synthetic credit portfolio, should have gotten more scrutiny from both senior management and the firmwide risk control function. “

This is truly a wake-up call to all organizations. It is an example of consciously adopted risk that produced billions of dollars of loss. The reason for its having reached the proportions that it did is described by the CEO as a lack of expertise, whether it be in terms of market knowledge, management controls and processes or something else.

To help ensure appropriate levels of expertise, an organization should ask these questions and act when the answer is negative:

  • Do the leaders of significant areas of the organization have deep knowledge of their operations?
  • Do the leaders of significant areas of the organization understand the importance of managing risk?
  • Do the leaders of significant areas of the organization have critical thinking capabilities and the communication skills to articulate what the risk profile of their operation looks like?
  • Do the leaders of significant areas of the organization ask for input from others who may be expert about risk?
  • Are those who facilitate the risk management process adequately knowledgeable and given sufficient resources?
  • Are there specialized risk management professionals in place in key areas, e.g. a chief information security officer (CISO) for information technology, as needed? Alternatively, is this role competently outsourced? 

Inadequate Standards or Models

Organizations of all sizes rely on standards or models, either self-designed or designed by an expert group (governmental or professional), which indicate when some aspect of the business is exceeding a safe level of operation. Insurers use loss-modeling tools; banks use “value at risk” models; manufacturers use all sorts of gauges, such as air safety levels and equipment safe usage levels.  There are also standards of safety applied to all manner of things both public and private, from buildings to transportation to infrastructure such as bridges, power grids and so on. These are routinely inspected to ascertain performance against pre-established standards of acceptability.

As can be readily appreciated, if the standard or model is faulty, then the business leader, staff or  risk professional is placed at a disadvantage in identifying or evaluating the likelihood or the size of a risk.

Consider that the models used by many banks and investment houses before the financial crisis of 2008 did not help them avoid major losses. The testimony quoted above shows issues with the model used to monitor the synthetic credit portfolio at JPMorgan Chase.

Consider that, according to the Associated Press in 2013, “Of 607,380 bridges, the most recent Federal Bridge Inventory showed that 65.605 were classified as structurally deficient and 20, 808 were as fracture critical. . . . Officials say the bridges are safe.” How can a state or city risk manager know how to handle risk associated with the bridges when the standard of safety is so confusing? Not surprisingly, there have been some major bridge failures in the recent past.

Organizations need to vet their standards and models. For example, they could:

  • Get second opinions on the model of choice,
  • Use multiple models, not just one,
  • Stress test the model at regular intervals,
  • Establish contingency plans in case the model fails.

No organization will eliminate all uncertainty. However, with the right risk culture, knowledgeable leaders and robust models, an organization can minimize exposure to unanticipated and unmitigated risk.

Is the Fed Going Soft on Big Banks?

In a Senate Banking Committee hearing earlier this summer, Sen. Elizabeth Warren (D-MA) and Federal Reserve Chairwoman Janet Yellen played their parts brilliantly. They acted out a time-tried political science convention, that legislators and journalists are judged on results while bureaucrats and professors are judged on rules.

At issue is Federal Reserve Board enforcement of its statutory obligations under Section 165 of the Dodd-Frank Act, to see to it that JP Morgan has orderly resolution plans in the event of failure. Broadly stated, that section of the Dodd-Frank Act empowered the Fed to impose “prudential standards” on bank holding companies with assets of at least $50 billion if an institution’s failure could affect “the financial stability of the United States.” The section also required the Fed to report its determinations annually to Congress.

The hearing demonstrated the limits of our current system and the need for interactive finance, by which I mean rewarding institutions and individuals with financial or strategic advantage for revealing information that details risk. Interactive finance will provide indispensable liquidity to crucial markets that currently see little trading. More importantly, interactive finance addresses the core challenges of concentrated market power in banking and of sclerotic market administration — of which Fed efforts to manage orderly resolution of JP Morgan are but a single, frightening circumstance.

The issues are crucial not just for our economy as a whole but for insurers, in particular, because they are such large investors in securities offered by major financial institutions. The investments generate a high percentage of the insurance industry’s operating profits but expose it to catastrophic losses. For instance, in mortgage-backed securities, insurers hold more than $900 billion in commercial and multifamily real estate mortgages, according to the Mortgage Bankers Association’s Q4 2013 report. (That’s $343 billion in commercial and multifamily mortgage debt plus $567 billion in commercial mortgage-backed securities, collateralized debt obligations and asset-backed securities.) The Federal Reserve tallies life insurance companies’ holdings of residential mortgage-backed securities (RMBS) at $365 billion as of the end of the first quarter, 2014.

In that wonderfully well-acted hearing, Sen. Warren asked Chairwoman Yellen if JPMorgan could sell its assets without disrupting the economy and impelling a taxpayer bailout. Warren also asked: Where are those reports the Fed is to provide annually?

Warren was raising a key question: Is the Fed forbearing, being lenient on JPMorgan and other huge financial institutions?

Congress enacted Dodd-Frank in July 2010, and this March the Federal Reserve Board published 100 pages of rules and regulations implementing Section 165. That is a gap of 33 months. Congress has yet to see any Federal Reserve reports, but for a wholly lacking 35-page document, Warren asserts.

It’s possible that market administration is so complicated that it simply takes inordinately long to articulate and implement regulation and to report outcomes to Congress and the public. But the Warren-Yellen exchange revealed vastly more, specifically what appears to be a Federal Reserve policy to forbear on implementing its statutory obligations under Dodd Frank 165 in connection with JP Morgan and orderly resolution.

In the hearing, Sen. Warren expressly asked Chairman Yellen, “Can you honestly say that JPMorgan can be resolved in a rapid and orderly fashion…with no threats to the economy and no need for a taxpayer bailout?” And, “Are you saying the plans [for resolution] are not credible, and you’re asking them to change their plans?”

Yellen never really indicated that JPMorgan has any credible plan in place for its orderly resolution or has submitted any since 2012. Instead, she articulated process, iteration and feedback. Dodging Warren’s direct questions, Yellen essentially said that complexity drives inconclusiveness and explains the lack of annual reports to Congress. Yellen used the word, “feedback,” five times in her replies.

Both Yellen’s circumlocution on JPMorgan resolution and its outsized concentration are but symptoms of market and market administration sclerosis, which Warren is trying desperately to treat.

Absolutely brilliant performances by each woman. No question about it. As a legislator, Warren underscored that she wants results. As a regulator, Yellen adhered to processes and rules and the Federal Reserve Board’s traditional discretion in so weighty and complex a matter.

Requests for clarification from the Federal Reserve Board for this article elicited no further information about the important question: Is the Federal Reserve forbearing on implementation of Dodd-Frank 165 bank resolution?

End of story?

No. Two problems remain.

First, what of the JPMorgan resolution elephant in the room?
Why couldn’t Yellen assert simply to Sen. Warren that JPMorgan — with its $2.5 trillion in assets and 3,391 subsidiaries — has credible plans in place for rapid, orderly resolution without triggering a systemic threat or taxpayer bailout?

Could it be “the economy, stupid,” in James Carville’s bald turn of phrase? Monetary policy regulators repeatedly assert they have a very small palette of choices. At a conference of central bankers in Jackson Hole on Aug. 22, Yellen acknowledged that monetary policy makers are grappling with how to determine the best mechanisms to foster growth and to maintain price stability. “While these assessments have always been imprecise and subject to revision, the task has become especially challenging in the aftermath of the Great Recession, which brought nearly unprecedented cyclical dislocations and may have been associated with similarly unprecedented structural changes in the labor market — changes that have yet to be fully understood,” she said. Eleven days earlier, in a speech to a finance conference in Sweden, Fed Vice Chairman Stanley Fischer cautioned of protracted economic slowdown well over a dozen times as he articulated policy-making constraints. “In the United States, three major aggregate demand headwinds appear to have kept a more vigorous recovery from taking hold: the unusual weakness of the housing sector during the recovery period; the significant drag — now waning — from fiscal policy; and the negative impact from the growth slowdown abroad — particularly in Europe,” he said.

In such weak economies, the last thing Yellen or any senior regulator with any sense of self-preservation would do is to acknowledge that JPMorgan cannot credibly assert that it can resolve itself. Milton Friedman and Anna Schwartz’s analysis (1963) that regulators — and not a spending crisis — triggered the Great Depression through monetary policy yet resounds in economic thinking. Hence all of Yellen’s process talk, for it would be incautious to respond negatively to Sen. Warren’s unambiguous questions whether JPMorgan can resolve itself without wreckage or bailout.

In the pantheon of Federal Reserve Board chairs, if one thinks of Fed Chairman William McChesney Martin (1951-1970) for probity, Arthur Burns (1970-1978) for concision, G. William Miller for brevity (1978-1979), Paul Volcker for decency (1979-1987), Alan Greenspan for obscurity (1987-2006) and Ben Bernanke (2006-2014) for agility, Yellen may be laying claim as the Fed’s Rocky Balboa. In winter and early spring, she said weather was the economy’s problem. In mid-summer, she gamely parried Warren’s Ted Kennedy, who was insisting government can do better.


Second, what of sclerotic market administration? This represents the graver challenge. Warren got no answers or reports. Yellen advertised she cannot or will not enforce Fed rules. All they achieved is good video. Both came up empty.

Citizens voted for change six years and again two years ago. Certainly, voluminous regulation — the rules and regulations on Section 165 fill 100 pages with single-spaced, eight-point type — is a change in a very narrow sense from Bush-Cheney deregulation, outsourcing and selling of public resources and lands. However, such extensive regulation raises regulatory costs and seems to mainly benefit practitioners of crafting and evading the regulations rather than providing broader economic benefits.

Interactive Finance

Technology now affords near-real-time or even real-time market administration, providing the kind of protection that the Fed can’t and removing the JPMorgans of the world as existential threats to the economy. Interactive finance animates the next step to create wealth with the data and meta data. There’s everything to gain and nothing to lose.

Prudential valuation based on credit ratings has had its run. In terms of evaluating securities, the system is so laden with conflicts of interest between the rating agencies and the offering firms that it is amazing it has persisted after having such catastrophic effects in the 2008 asset crisis.

An International Accounting Standards Board/International Finance Reporting Standards draft report is exploring new approaches to risk management generally. And confidence accounting is receiving more traction for its greater transparency and accuracy than traditional, prudential valuation. Its robust explanatory powers support greater prospective certainty and exactness determining value and risk.

But the most promising possibility is interactive finance, which administers markets more efficiently than the incumbent regulatory system, so frustrating to Warren and Yellen alike, and more effectively than the compromised prudential valuation system.

Let’s begin with a shared orientation that information and data are the crucial wealth generation engines of the 21st century. Large search firms like Google and online retailers like Amazon or news and information content providers like Bloomberg and Thomson Reuters necessarily seek to exploit first-mover advantages and deep domain competencies by controlling as much of the data associated with their online businesses as possible. The new wealth in information is no less hoarded than pre-Internet wealth in fiat currencies, art, precious metals, insurance and real estate.
But remember: The markets are liberalized. Better mousetraps beat the world to innovators’ enterprises.

Airbnb is using an overlay of information to disintermediate hospitality and accommodations incumbents, and Uber is throwing hackney licensing for a loop. New entrants Datacoup and Meeco are enabling users to sell their data, even challenging the largest Internet firms in the world. And, because of liberalized markets, more and more innovation and individual and institutional wealth creation with data and meta data will take place.

Marketcore, a firm I advise, is pioneering interactive finance to generate liquidity by rewarding individuals and institutions for sharing information with financial or strategic advantage for revealing information that details risks.

Think of it this way: Interactive finance crowd-sources market participation by rewarding individuals, organizations and institutions seeking loans, lines of credit or mortgages or negotiating contracts with monetary or strategic incentives and rewards. Whether risk takers are a bank, insurance company or counter party, granters define rewards. A reward can constitute a financial advantage — say, a discount on the next interval of a policy for individuals purchasing retail products. The reward can express a strategic advantage — say, foreknowledge of risk exposure for institutions dealing in structured risks like residential mortgage-backed securities or bonds, contracts, insurance policies, lines of credit, loans or securities.

As crucially, transaction credits empower any and all market participants to act as granters of rewards. Individuals, organizations and institutions grant strategic or monetary incentives to counter parties seeking to acquire risks, too.

All this transpires on currently existing broadband, multimedia, mobile and interactive information networks and grids. Interactive finance realizes a neutral risk identification and mitigation system with a system architecture that scans and values risks, even down to individual risk elements and their aggregations. As parties and counter parties crowd markets, each revealing specific risk information in return for equally precise and narrowly tailored rewards and incentives, their trading generates fresh data and meta data on risk tolerances in real time and near real time. This data and meta data can then be deployed to provide real-time confidence scoring of risk in dynamic markets. Every element is dynamic, like so many Internet activities and transactions.

Talk about efficiency!

Crucially, interactive finance constantly authenticates risks with constantly refreshing feedback loops. Risk determination permits insureds, brokers and carriers to update risks through “a transparency index. . . based. . . on the quality and quantity of the risk data records.” Component analysis of pooled securities facilitates drilling down in structured risk vehicles so risk takers, including insurers and reinsurers, can address complex contracts and special pool arrangements with foreknowledge of risk. Real-time revaluation of contracts clarifies “the risk factors and valuation of [an] instrument” and, in so doing, “increases liquidity and tracks risks’ associated values even as derivative instruments are created.”

Through these capabilities, Marketcore technologies connect the specific, individual risk vehicle with macro market data to present the current monetary value of the risk instrument, a transparency index documenting all the risk information about it and information on the comparative financial instruments. Anyone participating receives a complete, comprehensive depiction of certainty, risk, disclosures and value.

Think how readily Chairwoman Yellen could respond to Sen. Warren with information replenished constantly and willingly by market participants and verified by constantly updating feedback loops.
Think how much Sen. Warren could ask regarding transparency. She’d receive a verifiable response, with great confidence.

Interactive finance allows for transparent markets capable of clearing and self-correcting. With interactive finance, legislator and regulator can get results and adhere to rules. Sen. Warren could administer vibrant, efficient, self-stimulating and self-correcting markets powered by information and data-verifying risks and clarifying confidence. Chairwoman Yellen could enforce Fed rules.
Both could get well beyond JPMorgan’s compliance issues to apply their appreciable talents administering information economies, the wellsprings of 21st century commerce and economic growth.