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Advocating for a real Eve banking system

Author
Ivy Romanova
State Protectorate
Caldari State
#21 - 2012-05-29 14:47:32 UTC  |  Edited by: Ivy Romanova
I LOVE that idea
but I think we should have some regulations to prevent banks from springing up everywhere
like , the bank must have a minimum asset value of 10 billion and must maintain a required reserve ration of 10%(customization up to 40%) or above at all time

Banks can apply for federal deposit protection for a certain price , and ensured bank will be preferential listed in the banking system provider market with a BIG blinking PROTECTED logo
that would make the New Eden economic system A LOT more dynamic

Kudos to you for coming up with that idea

▬▬▬▬▬▬▬▬▬▬ஜ۩۞۩ஜ▬▬▬▬▬▬▬▬▬▬ DAMN THIS    SIGNATURE    IS FANCY ▬▬▬▬▬▬▬▬▬▬ஜ۩۞۩ஜ▬▬▬▬▬▬▬▬▬▬

warzonetemp
Aliastra
Gallente Federation
#22 - 2012-05-29 18:13:55 UTC  |  Edited by: warzonetemp
Ivy Romanova wrote:
I LOVE that idea
but I think we should have some regulations to prevent banks from springing up everywhere
like , the bank must have a minimum asset value of 10 billion and must maintain a required reserve ration of 10%(customization up to 40%) or above at all time

Banks can apply for federal deposit protection for a certain price , and ensured bank will be preferential listed in the banking system provider market with a BIG blinking PROTECTED logo
that would make the New Eden economic system A LOT more dynamic

Kudos to you for coming up with that idea


Thanks
Di Mulle
#23 - 2012-05-29 19:34:43 UTC
warzonetemp wrote:


So the last 500 years and especially the last 200 years never happened, we don't have highways, trains, or even buildings, because capitalism doesn't work.




In a sense, it worked, because not so many people took your money and ran away. In EVE, they will.
<<Insert some waste of screen space here>>
warzonetemp
Aliastra
Gallente Federation
#24 - 2012-05-29 22:34:38 UTC  |  Edited by: warzonetemp
Di Mulle wrote:
warzonetemp wrote:


So the last 500 years and especially the last 200 years never happened, we don't have highways, trains, or even buildings, because capitalism doesn't work.




In a sense, it worked, because not so many people took your money and ran away. In EVE, they will.


Ever heard of the American west, why do you think everyone had a gun? :p

I am not saying its perfect, but we made alot of progress using capitalism and banking. Yeah there were some great bank heists beyond just cowboys from western movies, read up on credit mobilier scandal from the 19th century, a few bankers were able to get away with what amounts to today is billions. 2007-2008 was not the first time. As long as greed exists beyond normal conventions, wherever you are, there will be crime. However, we don't let one bad experience sour everything. We rebuild and keep growing despite it. The railroads later were incorporated under industrialists and banks were restructured.

"Greed is for lack of a better word is good" in small doses. Banking focuses this greed into something extremely productive.

Let me ask my naysayers, do you know how much it costs to set up a research POS in high sec? Do you know how much it costs to set up a manufacturing array in low sec or null sec? Do you know how much it costs to set up stations in sovereign systems? How much does it take to buy a super cap carrier? or a Titan?

Smaller alliances and large corporations will spend a good deal of time devoted to making, begging, or even trying to find a backer for isk that may not always work out.

What a dedicated banking systems gives them is a real chance to make it, if they need financing and meet standard requirements set up by an individual bank, i.e. collateral value, interest agreements, strength of members, and positioning. A Nullsec alliance in Providence in the midst of a war would not likely get financing easily without high interest rates for example. That's only reflecting loans, we're not even into investing arm of banks yet.

The best way to fight is based on the quality of your men and the quality of weapons, smaller alliances and corporations might have the manpower, but lack the resources for war. Banking offers to give you the back up financing to buy those weapons of war, if you seek to and even arrange for deals of surrender more amicably between parties as the middle man. Money should be a deadly weapon in eve, even more lethal than the old Doomsday weapons.

As I said in terms of investment, expansion of demand when cash is sitting still is not efficient, so an increase in demand will actually increase capital within the market, i.e. for those that study economics, Eve is operating not at the optimal point between supply and demand in terms of capital so by moving demand up to a certain point your actually raising cash flow within your market. You can have smart investment eve players buying and selling goods, even speculating into the tens of billions of isk. You can devalue the price of tritanium from 5-6 isk right now at jita to 2-3 isk or raise it to 10 isk per trit.

The possibility for good and bad is endless.
Di Mulle
#25 - 2012-05-30 14:27:55 UTC
warzonetemp wrote:
...


Tons of writing, not so much of thinking. You still do not bother to answer most basic questions.

What banks will be working for ? Giving "small corps money for war", i.e. basically to burn that money ?Lol Where is a profit in that ? If there is no profit, who will give money to banks ?

Giving money for industrial operations ? What is the way to secure those investments, to manage risks, etc. ? Who will do that ?
How to secure from a biggest risk of them all - and it is not even a fraud, it is a player simply not logging in anymore for whatever reason.

And of course, your wall of letters still has not answered very primitive question - how you are going to stop those wannabe bankers from running with all your money. Or again, becoming simply bored and forgetting a game.
<<Insert some waste of screen space here>>
Kaelie Onren
Native Freshfood
Minmatar Republic
#26 - 2012-05-30 15:24:27 UTC
warzonetemp wrote:
Di Mulle wrote:
warzonetemp wrote:


So the last 500 years and especially the last 200 years never happened, we don't have highways, trains, or even buildings, because capitalism doesn't work.




In a sense, it worked, because not so many people took your money and ran away. In EVE, they will.


Ever heard of the American west, why do you think everyone had a gun? :p

I am not saying its perfect, but we made alot of progress using capitalism and banking. Yeah there were some great bank heists beyond just cowboys from western movies, read up on credit mobilier scandal from the 19th century, a few bankers were able to get away with what amounts to today is billions. 2007-2008 was not the first time. As long as greed exists beyond normal conventions, wherever you are, there will be crime. However, we don't let one bad experience sour everything. We rebuild and keep growing despite it. The railroads later were incorporated under industrialists and banks were restructured.

"Greed is for lack of a better word is good" in small doses. Banking focuses this greed into something extremely productive.

Let me ask my naysayers, do you know how much it costs to set up a research POS in high sec? Do you know how much it costs to set up a manufacturing array in low sec or null sec? Do you know how much it costs to set up stations in sovereign systems? How much does it take to buy a super cap carrier? or a Titan?

Smaller alliances and large corporations will spend a good deal of time devoted to making, begging, or even trying to find a backer for isk that may not always work out.

What a dedicated banking systems gives them is a real chance to make it, if they need financing and meet standard requirements set up by an individual bank, i.e. collateral value, interest agreements, strength of members, and positioning. A Nullsec alliance in Providence in the midst of a war would not likely get financing easily without high interest rates for example. That's only reflecting loans, we're not even into investing arm of banks yet.

The best way to fight is based on the quality of your men and the quality of weapons, smaller alliances and corporations might have the manpower, but lack the resources for war. Banking offers to give you the back up financing to buy those weapons of war, if you seek to and even arrange for deals of surrender more amicably between parties as the middle man. Money should be a deadly weapon in eve, even more lethal than the old Doomsday weapons.

As I said in terms of investment, expansion of demand when cash is sitting still is not efficient, so an increase in demand will actually increase capital within the market, i.e. for those that study economics, Eve is operating not at the optimal point between supply and demand in terms of capital so by moving demand up to a certain point your actually raising cash flow within your market. You can have smart investment eve players buying and selling goods, even speculating into the tens of billions of isk. You can devalue the price of tritanium from 5-6 isk right now at jita to 2-3 isk or raise it to 10 isk per trit.

The possibility for good and bad is endless.


You sound like a university english major... sorry. :)
I work at a wall street bank. And in short, your diatribe sounds very academic, but not applicable to this game.
Kaelie Onren
Native Freshfood
Minmatar Republic
#27 - 2012-05-30 15:37:10 UTC  |  Edited by: Kaelie Onren
Ivy Romanova wrote:
I LOVE that idea
but I think we should have some regulations to prevent banks from springing up everywhere
like , the bank must have a minimum asset value of 10 billion and must maintain a required reserve ration of 10%(customization up to 40%) or above at all time

Banks can apply for federal deposit protection for a certain price , and ensured bank will be preferential listed in the banking system provider market with a BIG blinking PROTECTED logo
that would make the New Eden economic system A LOT more dynamic

Kudos to you for coming up with that idea


How do you propose to enforce said regulations? What happens when a bank fails to meet its capital requirements? You can't hardcode lock their account, that would defeat the whole purpose of having a liquid monetary system of money market interbank lending. You can fine them, but what if they liquidate to another corp so cannot pay the fines? Sorry, there doesn't exist the notion of anit-money laundering in EVE (trust me, I proposed instituting such laws a year ago. Didn't work) Try to chase the culprit? He just biomass himself. Heard of Alts? Heard of Phasor Corp (yes, ah MD forum, I told you so :)

All the reasons against circle back to the fundamental principle: EVE has no criminal justice system, criminal culpability, transparent credit markets, jailcells to put Barney Madoff's in, nor central fiscal regulation and oversight.
warzonetemp
Aliastra
Gallente Federation
#28 - 2012-05-31 01:53:29 UTC  |  Edited by: warzonetemp
Di Mulle wrote:
warzonetemp wrote:
...


Tons of writing, not so much of thinking. You still do not bother to answer most basic questions.

What banks will be working for ? Giving "small corps money for war", i.e. basically to burn that money ?Lol Where is a profit in that ? If there is no profit, who will give money to banks ?

Giving money for industrial operations ? What is the way to secure those investments, to manage risks, etc. ? Who will do that ?
How to secure from a biggest risk of them all - and it is not even a fraud, it is a player simply not logging in anymore for whatever reason.

And of course, your wall of letters still has not answered very primitive question - how you are going to stop those wannabe bankers from running with all your money. Or again, becoming simply bored and forgetting a game.


Actually no, banks will be working for making money over the long haul from depositors funds.

As I said it depends on their lending policies, some banks will be foolish and loan out a ton of money to bad investments and others will be very narrow minded and loan only to the big alliances that can afford it.

For example, If AAA wants to take up a loan to fight NCdot, a bank could ask for AAA to put down collateral like items or even a fleet of machariels. If AAA does not repay the bank on its interest and principal, the bank automatically takes the collateral as its property.

Small corporations can take loans, but they need a collateral and proof that they can repay the loans. A noob high sec corp for instance will not likely be able to have a loan. However, an established research corp with blueprints as collaterals would be able to buy themselves a high sec research POS and maybe a few other things to make tech 2 bpc and more isk.

As for what Collateral must be able to meet a proportion of the loan:

If you want 1 Billion isk and collateralize a macharial, fine, your ship is worth more than the loan, no issue about it.

If you want 2 billion and collateralize a macharial, some banks won't give you a loan and those that do should be smart enough to charge you a higher rate of interest in case you're a dead beat.

Case and point, unless you're really bad at handling money, which bankers who chose this profession should not be, you would never loan someone isk without expecting reimbursement.

As for the biggest issues you guys keep pointing out, enforcement:

1. Set up a deposit insurance system to protect bank accounts up to an amount like 1 billion isk.

2. Make sure investment and loans meet reserve requirements aka no bank can take out all their money at once on a foolish investment, nor pay their CEO a exorbitant amount. I like the reserve requirement idea proposed earlier with a sliding scale up to 40-50% of all deposits be invested or only 10%. US Banks in the real world do have reserve requirements set by the US federal reserve, so I don't see a problem if CCP does the same based on a sliding scale, heck it might even solve their inflation issue.

3. Banks cannot have inactive leadership, if a bank leader, i.e. CEO or director of investment is inactive for more than 1 week, his position is voided automatically and depositors choose the new replacement from remaining members of the bank in a vote, simple majority wins. Leadership in banks aren't based on the old shares value that corporations are running on, but a depositor based system more common with co-op banks than their larger wall street cousins,

4. Banks cannot transfer any of their assets or cash into corporations, they can only transfer if there exists a loan involved and collateral is approved. Of course everything is limited due to the reserve requirement.

5. All depositors will have informational access to the status of the bank's current fiscal condition, i.e. how much money they have, how much they have in outstanding investment and loans, and what they have internally in assets both collateral and potential collateral. (CCP doesn't need to do much on this, a simple API tweak can allow this thing easily)

Banks are not regular corporations, they should never be treated as a regular corporation or else you will have ugly problems like EIB.
Ivy Romanova
State Protectorate
Caldari State
#29 - 2012-05-31 02:04:36 UTC
Kaelie Onren wrote:
Ivy Romanova wrote:
I LOVE that idea
but I think we should have some regulations to prevent banks from springing up everywhere
like , the bank must have a minimum asset value of 10 billion and must maintain a required reserve ration of 10%(customization up to 40%) or above at all time

Banks can apply for federal deposit protection for a certain price , and ensured bank will be preferential listed in the banking system provider market with a BIG blinking PROTECTED logo
that would make the New Eden economic system A LOT more dynamic

Kudos to you for coming up with that idea


How do you propose to enforce said regulations? What happens when a bank fails to meet its capital requirements? You can't hardcode lock their account, that would defeat the whole purpose of having a liquid monetary system of money market interbank lending. You can fine them, but what if they liquidate to another corp so cannot pay the fines? Sorry, there doesn't exist the notion of anit-money laundering in EVE (trust me, I proposed instituting such laws a year ago. Didn't work) Try to chase the culprit? He just biomass himself. Heard of Alts? Heard of Phasor Corp (yes, ah MD forum, I told you so :)

All the reasons against circle back to the fundamental principle: EVE has no criminal justice system, criminal culpability, transparent credit markets, jailcells to put Barney Madoff's in, nor central fiscal regulation and oversight.



I know
the problem is EVE is overly inclined towards the guns blazing PvP direction and often forget the other portion of the crowd that prefers a higher degree of strategic planning and society building

but that doesn't mean we should stop nagging CCP about it
you know what the say
If you make enough fuzz about it , someone may actually comes over to see whats the fuzz is about

now how about lets brain storming about how laws could work in New Eden

▬▬▬▬▬▬▬▬▬▬ஜ۩۞۩ஜ▬▬▬▬▬▬▬▬▬▬ DAMN THIS    SIGNATURE    IS FANCY ▬▬▬▬▬▬▬▬▬▬ஜ۩۞۩ஜ▬▬▬▬▬▬▬▬▬▬

ShahFluffers
Ice Fire Warriors
Infinite Pew
#30 - 2012-05-31 05:54:46 UTC
warzonetemp wrote:
For example, If AAA wants to take up a loan to fight NCdot, a bank could ask for AAA to put down collateral like items or even a fleet of machariels. If AAA does not repay the bank on its interest and principal, the bank automatically takes the collateral as its property.

Why not move those Macherials to high-sec and sell them directly to the market? Your way just sounds horribly convoluted and more of a headache in the long run.

warzonetemp wrote:
Small corporations can take loans, but they need a collateral and proof that they can repay the loans.

Problem: you can't prove anything in an imaginary spaceship game. Trust is gained through word of mouth. And even then it is suspect (because the people vouching for you might be "in" on the scam.

warzonetemp wrote:
If you want 2 billion and collateralize a macharial, some banks won't give you a loan and those that do should be smart enough to charge you a higher rate of interest in case you're a dead beat.

So I take out a loan that is double that of the Macherial I put down as collateral on an alt character. Once I have the money... I buy two Macherials, fly them out to safespot, "abandon" them, and then have trusted friends (or other alts) pick them up.
And no... the system cannot differentiate between someone doing this by accident and getting REALLY unlucky or someone who does this on purpose. Plus, I believe repackaging an item resets its database ID... so you literally CAN'T track it through the system.
Lin-Young Borovskova
Doomheim
#31 - 2012-05-31 13:12:18 UTC
warzonetemp wrote:
The reason why real world banking is the first and best choice for keeping money safe is that you reduce your personal risk of losing it in one or more locations.



Yeah everyone knows how awesome banks, financial corps and economic model are...

The economic model (and the real one at first) in the first place is the worst model if anything you could choose.

As a scam initiative however I'd give you 5/10

brb

Hrothgar Nilsson
#32 - 2012-05-31 17:39:34 UTC
warzonetemp wrote:
[Actually, do you have like $10,000 in you wallet? I'd be surprised if you do. Very few people keep money to themselves in the real world, we believe we do, but the monthly bank statements are only showing you one side of the equation, not the banking side of where your money is pooled for use.

After a certain point, you basically should be putting money into a bank, which is a real world example of how modern banking works. These deposits are then reinvested by the banks in businesses or other areas to generate more funds.

In eve, you have players with billions or even trillions of isk in wallets, sitting as static cash. After a certain amount inside your wallet, you should be putting money into banks, imagine if the game dynamics had it that you would lose your entire wallet if you get pod'ed. That would be the real world example of losing a $10,000 wallet :D

Right now, most of eve is static in terms of unused money, there's a good deal of capital that could be used.

I was under the impression that ISK was electronic, deposited in a Secure Commerce Commission bank account, and that they assess sales tax and broker's fees and such when selling, placing buy orders, creating/completing contracts, etc.

I was further under the impression that my wallet transactions are an electronic bank statement, etc.

ISK has never struck me as a physical currency carried around in an actual "wallet".
Nendail Smith
Lockheed Nighthawk
#33 - 2012-05-31 17:43:17 UTC
warzonetemp wrote:

Industrialists keep crying and ****, but in all reality they hold more than 70% of all isk in the game in liquid assets. While PvP alliances hold hard assets like caps and systems, they still require cash to keep their operations and building projects going, very few can operate asteroid mining, wormhole, and moon mining to a degree to keep up with the demands of PvP.


ROFLMAO!

Yeah, it's industrialists that hold the isk. That is why they funded the Jita ganking, and they funded the ice interdiction, and every other major operation the goons and test and other big alliances do in highsec that just cost them millions or billions of isk.

Combat alliances hold the isk in Eve. You know, the ones that can put up towers on moons in Null sec, and farm goo like mad yet still have the force to protect said moons.

Industrialists hold the wealth... ROFL
Trollin
Perkone
Caldari State
#34 - 2012-05-31 17:57:50 UTC
this dude trolled this **** out of all of you

10/10

stop replying and let it die.

We are our own worst enemy.

Zyress
Caldari Provisions
Caldari State
#35 - 2012-05-31 20:42:03 UTC
Sounds like an addition for scammer/fraud play which sadly is part of the game, but personally I say "hands off my isk f#cker"
warzonetemp
Aliastra
Gallente Federation
#36 - 2012-05-31 21:23:24 UTC  |  Edited by: warzonetemp
Trollin wrote:
this dude trolled this **** out of all of you

10/10

stop replying and let it die.


haha P you just wished you had started it first.

As for each point,

1. Most banks won't loan unless you had collateral worth equal or less than loan, the ones that do loan are equivalent to subprime lenders that still exist despite what happened in 2007. The only difference is in my system no one is too big to fail.

If you pull that trick, you'll not be allowed back into any bank again until loan is repaid, no such thing as bankruptcy. Also, credit history in eve will be based on corporation and character history. You want to defraud an eve bank, you better pull a huge heist as you're wasting years on an alt for one big score. Small banks with like 500bill would be crappy spots to cheat as their loans are small, you'll need to banks with 5 trillion or more to make the the eve time paid to the account worth it with one fake loan out of hundreds of real ones for an amount exceeding 7 billion or 1 yr worth of plex + inflation.

2. Why transfer to get a loan instead of selling an item or in my example a fleet of machariels? Simple, how long does it take to jump up to high sec, put up a huge order, and get a buyer for 10 billion isk worth of machs? Unless you're in a hot market, it can take days to unload. My banking system cuts it down to minutes.

You learned isk/hr value at some point, isn't my idea easier and cost effective.

3. Said it before capitalism is not fair or nice, its just progress. Don't blame the banks for your credit card bills or bad loan terms.

4. Isk is more like hard currency as the money is private and not invested outside the owner's desire. Which is one reason why a shift in demand in eve market can effect money supply in eve as we're sitting on cash most of the time.

You guys only point out negatives to eve banking, or saying its impossible to solve. Well let me call you out, how would you create a banking infrastructure in eve? Even if you don't think its possible. If you have better idea, fine relate it.

I'm an accountant not a banker, big difference.
AM Boveri
420 Enterprises.
The Initiative.
#37 - 2012-05-31 23:49:00 UTC
Again you're just talking "what if's" without providing any true ideas or suggestions. I have yet to see you put up anything constructive.
warzonetemp
Aliastra
Gallente Federation
#38 - 2012-06-01 00:49:45 UTC  |  Edited by: warzonetemp
AM Boveri wrote:
Again you're just talking "what if's" without providing any true ideas or suggestions. I have yet to see you put up anything constructive.


Actually the last post was answers and explain why it's better. The Mechanics were already outlined earlier in one of my long posts. (I should have gone into programming to be honest), examples of innovations and suggestions i.e. A separate class of incorporation, fixed reserve amounts for isk as applied by CCP, the whole loan system with collateral as the basis, new rules for leadership under a co-op basis instead of share structure, and so on....

Hell, I even pointed out that transparency is needed with a small tweak to API keys, which is very doable for CCP.

Look like you weren't paying attention as I had outlined everything and how it'd work.
Kaelie Onren
Native Freshfood
Minmatar Republic
#39 - 2012-06-06 14:25:44 UTC
warzonetemp wrote:
AM Boveri wrote:
Again you're just talking "what if's" without providing any true ideas or suggestions. I have yet to see you put up anything constructive.


Actually the last post was answers and explain why it's better. The Mechanics were already outlined earlier in one of my long posts. (I should have gone into programming to be honest), examples of innovations and suggestions i.e. A separate class of incorporation, fixed reserve amounts for isk as applied by CCP, the whole loan system with collateral as the basis, new rules for leadership under a co-op basis instead of share structure, and so on....

Hell, I even pointed out that transparency is needed with a small tweak to API keys, which is very doable for CCP.

Look like you weren't paying attention as I had outlined everything and how it'd work.


You may be an accountant in real life, but trying to apply real life 'game mechanics' to a totally different system is not as easy as you seem to think. You outline rules that have glaring holes, and when people point out the holes, you challenge them to fix them for you. Honestly, the benefits to the game do not outweigh the wasted time for people to try to solve this problem.

If you want to read up on some basis on how this can be tackled, (NOTE: as a theoretical exercise ONLY, SPOILER ALERT: CCP won't bite, as it would be too hard to implement) Instead of trying to draw blood from a stone in this forum, just google for 'kaelie onren anti money laundering' and read. I can't be bothered to argue with you points that have been many times discussed and discounted already.

Kaelie Onren
Native Freshfood
Minmatar Republic
#40 - 2012-06-06 14:31:12 UTC
warzonetemp wrote:


I'm an accountant not a banker, big difference.


That explains the naive view of the banking system you are presenting.

PS I *am* a banker :)
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