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Debt is like a cancer, Nobel Laureate Myron Scholes says. "You have to proactively do something to reduce it." "Someone need to think about creating a new, more dynamic accounting system? and new risk management systems to handle [market] shocks," said Scholes, who argued that more economic flexibility would help reduce - though not eliminate - such destabilizing events. One simple form of flexibility, Scholes offered, is a "Put" option on an asset. This type of financial contract provides liquidity when it is needed most and defines that liquidity for a specific payoff, he explained.
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