Global settlement risk is hard for me to quantify, and you're right - that might be a major factor in aggressively-appreciating FPAs. There's also the issue that margin calls are implemented too conservatively; a +1% per day asset would likely need to have margin calls that buy at much more than 10% above the feed. Conservative margin calls are black swan magnets.
BSIP18 will be a good step, but I still think it's a bandaid. The fact that a black swan is caused by a single undercollateralized debt position, however small, is absolutely insane to me. I could owe $1, the next guy above me could have a 6000% collateral ratio, and if my collateral ratio goes below 100% the bitAsset would be shut down and all that juicy collateral returned. It's madness.
How do you believe we could improve upon this current system? Are there comparisons we could make to centralized systems? There are no bad ideas when brainstorming! :)
I haven't thought about it yet as thoroughly as I'd like. But it does seem like a global liquidity pool might not be a bad idea. Maybe you aren't allowed to short something until you pay a "membership fee" or something, and that fee pool is used to cover undercollateralized assets. If you're the account responsible for the black swan, then you get kicked out until you pay back into the pool. Maybe?