This ties into what I like to call the "other gambler's fallacy", wherein one's visceral understanding of probability tends to exaggerate high probabilities and

This ties into what I like to call the "other gambler's fallacy", wherein one's visceral understanding of probability tends to exaggerate high probabilities and underestimate low probabilities. That is, one sees a probability like 0.001, and ends up treating it as though it were zero. That said, I'm not sure about the solution the guy proposes. It's basically patents for esoteric financial instruments. While I don't see anything inherently wrong with the idea, patents as they are now nominally exist to speed innovation. This idea is intended to slow the spread of innovations in one particular area. In other words, it's possible that this system could develop all the problems that the patent system has: people would come up with slight variations on an existing financial instrument so that they could sell it without buying a license from the creator, or for marketing reasons, or whatever. This would naturally make instruments more complicated, which in turn makes them harder to reason about.