Actually, the current credit crisis is not the result of risk concentration, but of the wide dispersion of risk via securitisation in such a way that nobody know who's left holding the bag and so nobody trusts anyone else and the credit system gets all gummed up.

In other words, it would be a good thing if risk were concentrated in a few, identifiable, "single points of failure" because then the failures could be contained.

Instead we have poorly diversified risk in a majority of institutions (which makes them rather vulnerable to shocks) and, in addition, the spreading out of this risk through securitisation (which allows those doing the securitisation to generate even more risk).

In that sense, it's not clear to me how peer-to-peer "risk sharing" is a good thing. If risk is not confined to small containers it gets much harder to control.

It'd be nice if the battle were only against the right wingers, not half of the left on top of that — François in Paris