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A bank with benefits

Author
Pickle Solette
The Scope
Gallente Federation
#1 - 2014-02-21 20:54:05 UTC
I'm new to Eve but I can already see how this community feels about banks. Not that I blame you since there's really no repercussions to stealing everyone's money, but I still think banking can be a valid feature of the game.

What if someone created a bank that, on top of paying interest, provided you with other benefits such as:

-Increase interest rates over time

-Tiered interest rates

-Redeemables like escorts, refining services, etc.

-Brokerage services; the stock being ore. We have offices in every region and use a certain amount of your investment to buy ore at the lowest available price. We provide you with a daily report on regional prices; you tell us when you want us to sell the ore and we send you the profits.

Please feel free to poke holes in these ideas or add your own. Basically, what would you like to see in a bank?

Nedly Stark
ARAZ Engineering
#2 - 2014-02-21 21:04:30 UTC
First hole: this will last 1-2 weeks till you realize you have to put more time into it for more clients
second hole: non collateralized deposits?
Third: i smell someones alt of an alt


Good luck
Pickle Solette
The Scope
Gallente Federation
#3 - 2014-02-21 21:13:37 UTC
Nedly Stark wrote:
First hole: this will last 1-2 weeks till you realize you have to put more time into it for more clients
second hole: non collateralized deposits?
Third: i smell someones alt of an alt


Good luck


There's no way to prove it I suppose, but this is my only account. How would you collateralize a deposit?
unidenify
Deaf Armada
Deaf and Daft
#4 - 2014-02-21 21:25:03 UTC
Pickle Solette wrote:
Nedly Stark wrote:
First hole: this will last 1-2 weeks till you realize you have to put more time into it for more clients
second hole: non collateralized deposits?
Third: i smell someones alt of an alt


Good luck


There's no way to prove it I suppose, but this is my only account. How would you collateralize a deposit?


problem I hear about banks in eve online is that it grow too fast, and crash itself.

I decide to humor myself and left 130 million isk in one bank that claim to have 4.5% interest/week.

that was 3 months ago, and website for said bank now disappear.

last time I check, it hit around 550 million isk

only loss for me is initial 130 million.

clearly, real solution is have collateralize deposit, but I don't think there are easy way to set it up in EVE online

CPP need to add special items that is useless to players but extreme valuable to bank
SabotNoob
Doomheim
#5 - 2014-02-21 21:38:40 UTC
I often wonder if a bank in EVE might survive by giving dirt cheap interest rates, kind of like in real life. I'm thinking about less than 1%, to prevent rapid growth and subsequent crashes. Players could still earn some ISK and the bank wouldn't be under pressure to deliver so much interest.

OBVIOUSLY there's the trust issue, I know. But if that could be figured out and there's a low interest rate in place to keep itself from crashing, it might fare better than what we've seen in the past.

Just a thought, not sure if it's been tried.
Koniforous
Tauren Transit
#6 - 2014-02-21 23:04:45 UTC
SabotNoob wrote:
I often wonder if a bank in EVE might survive by giving dirt cheap interest rates, kind of like in real life. I'm thinking about less than 1%, to prevent rapid growth and subsequent crashes. Players could still earn some ISK and the bank wouldn't be under pressure to deliver so much interest.

OBVIOUSLY there's the trust issue, I know. But if that could be figured out and there's a low interest rate in place to keep itself from crashing, it might fare better than what we've seen in the past.

Just a thought, not sure if it's been tried.


This is exactly what led me to a 5% simple interest rate with the bank I'm running, and a very low capital volume. I have even placed policies in order to lower the capital volume and interest rate during times I am not playing Eve as much, but still wish to offer the banking service for other pilots. In addition, I have allowed for bank funds to be used in capital lending (loans, and bonds) when these programs are 100% secured and backed by trusted 3rd parties.

Pickle, I do like the ideas you've presented, but it would be an extreme amount of work on the bank operators' end. I do offer discounts, however, on items that my bank trades in, to any of those that inquire of price, but this is not something I do until they ask. And, its of little extra work since I have a smaller number of clients compared to some of the double and triple digit banks out there.

Now, I have given thought to the tiered interest rate idea, but it's not very attractive in terms of increasing the possibility of default. Grendell runs a bank with a sort of pseudo tiered interest rate which I think is beautiful. He sets an initial interest rate for sitting funds, and then increases it based on specific investment contracts those funds participate in.

Read the MD forums for a while, you'll find some interesting and clever policies that some banks have or do offer.
Pickle Solette
The Scope
Gallente Federation
#7 - 2014-02-21 23:24:33 UTC
Koniforous wrote:
SabotNoob wrote:
I often wonder if a bank in EVE might survive by giving dirt cheap interest rates, kind of like in real life. I'm thinking about less than 1%, to prevent rapid growth and subsequent crashes. Players could still earn some ISK and the bank wouldn't be under pressure to deliver so much interest.

OBVIOUSLY there's the trust issue, I know. But if that could be figured out and there's a low interest rate in place to keep itself from crashing, it might fare better than what we've seen in the past.

Just a thought, not sure if it's been tried.


This is exactly what led me to a 5% simple interest rate with the bank I'm running, and a very low capital volume. I have even placed policies in order to lower the capital volume and interest rate during times I am not playing Eve as much, but still wish to offer the banking service for other pilots. In addition, I have allowed for bank funds to be used in capital lending (loans, and bonds) when these programs are 100% secured and backed by trusted 3rd parties.

Pickle, I do like the ideas you've presented, but it would be an extreme amount of work on the bank operators' end. I do offer discounts, however, on items that my bank trades in, to any of those that inquire of price, but this is not something I do until they ask. And, its of little extra work since I have a smaller number of clients compared to some of the double and triple digit banks out there.

Now, I have given thought to the tiered interest rate idea, but it's not very attractive in terms of increasing the possibility of default. Grendell runs a bank with a sort of pseudo tiered interest rate which I think is beautiful. He sets an initial interest rate for sitting funds, and then increases it based on specific investment contracts those funds participate in.

Read the MD forums for a while, you'll find some interesting and clever policies that some banks have or do offer.


Thank you for the insight. What about the brokerage idea? Is anyone currently doing this, or would this not be viable for some reason?
Koniforous
Tauren Transit
#8 - 2014-02-21 23:29:25 UTC  |  Edited by: Koniforous
I like the brokerage idea. Like a bank but dealing with assets rather than capital? It would be difficult to judge if the entity trading your goods would be truthful in offering you the agreed upon % of the profits minus their cut, though.

It's probably more realistic just to sell it at a flat rate to an entity that would specialize in trading that commodity, of which several entities like this already exist.
RavenPaine
RaVeN Alliance
#9 - 2014-02-22 04:35:33 UTC
Real banks make their money by LENDING.
They give you 1% and lend your money out at 10%. They also have a margin of lending ability, like, 10 to 1 or something. So if they have 1 billion of *your* money, they can lend out 10 billion of *their* money.

What your asking, is for people to invest in you, and hope you can make profits and pay them back.
Morikar
#10 - 2014-02-23 02:01:03 UTC
I'm sorely disappointed in this thread. I came to a thread marked "A bank with benefits" expecting them to be offering free prostitutes with new accounts.

So very disappointed.
Berasus
Ice station zebra
#11 - 2014-02-23 03:41:16 UTC
Morikar wrote:
I'm sorely disappointed in this thread. I came to a thread marked "A bank with benefits" expecting them to be offering free prostitutes with new accounts.

So very disappointed.


For a minute there i thought i was the only one thinking "friends with benefits" when i read the thread title.
Felicity Love
Doomheim
#12 - 2014-02-24 04:26:29 UTC  |  Edited by: Felicity Love
What if we just never mentioned the words "player" and "bank" and "EVE" in same sentence/subject/threat ever again, much less as some sort of "feature" or "game content" concept.

Plenty of juicy scam territory out there, just waiting for the right angle to be played, without going to so much pretense and effort anyway. Pirate

Bottom line, you aren't proposing anything that a handful of players (in or out of a corp), or one player with a handful of decent alts, can't provide for themselves.

That's just the way EVE is.

"EVE is dying." -- The Four Forum Trolls of the Apocalypse.   ( Pick four, any four. They all smell.  )

Meilandra Vanderganken
Aliastra
Gallente Federation
#13 - 2014-02-26 12:51:08 UTC
History teaches us EVE banks are more volatile than any of their RL counterparts....
Isis Nightshade
House of Nightshade
#14 - 2014-02-26 13:28:44 UTC
I honestly don't understand the fascination with banks in this game. They are just ISK Doubler spammers that take longer to take your money. Just buy a PLEX in the summer and wait until Winter to sell it.
Batelle
Filthy Peasants
#15 - 2014-02-26 17:49:46 UTC
I wouldn't be interested at all. The problem with banks is that they are scams, not that they don't provide enough perks. Sprinkle sugar on a dog turd and its still a dog turd. Any bank that accepts unlimited donations is scam because there are far more people looking for an low-risk easy return on their isk than there are worthy borrowers that will pay back interest on their loan.

"**CCP is changing policy, and has asked that we discontinue the bonus credit program after November 7th. So until then, enjoy a super-bonus of 1B Blink Credit for each 60-day GTC you buy!"**

Never forget.

Hrothgar Nilsson
#16 - 2014-02-26 22:25:48 UTC  |  Edited by: Hrothgar Nilsson
Koniforous wrote:
SabotNoob wrote:
I often wonder if a bank in EVE might survive by giving dirt cheap interest rates, kind of like in real life. I'm thinking about less than 1%, to prevent rapid growth and subsequent crashes. Players could still earn some ISK and the bank wouldn't be under pressure to deliver so much interest.

OBVIOUSLY there's the trust issue, I know. But if that could be figured out and there's a low interest rate in place to keep itself from crashing, it might fare better than what we've seen in the past.

Just a thought, not sure if it's been tried.


This is exactly what led me to a 5% simple interest rate with the bank I'm running, and a very low capital volume. I have even placed policies in order to lower the capital volume and interest rate during times I am not playing Eve as much, but still wish to offer the banking service for other pilots. In addition, I have allowed for bank funds to be used in capital lending (loans, and bonds) when these programs are 100% secured and backed by trusted 3rd parties.

Pickle, I do like the ideas you've presented, but it would be an extreme amount of work on the bank operators' end. I do offer discounts, however, on items that my bank trades in, to any of those that inquire of price, but this is not something I do until they ask. And, its of little extra work since I have a smaller number of clients compared to some of the double and triple digit banks out there.

Now, I have given thought to the tiered interest rate idea, but it's not very attractive in terms of increasing the possibility of default. Grendell runs a bank with a sort of pseudo tiered interest rate which I think is beautiful. He sets an initial interest rate for sitting funds, and then increases it based on specific investment contracts those funds participate in.

Read the MD forums for a while, you'll find some interesting and clever policies that some banks have or do offer.

5% is pretty unsustainable for anybody trying to do a legit bank, there's simply a dearth of safe, collateralized investments for you to re-invest depositors' ISK in that will net you that sort of return. At 5%, you're essentially promising to double depositors' ISK every year.

You mentioned Grendell, what he runs is actually similar to a mutual fund. He pays a sustainable interest rate based on investments in safe, collateralized loans, or people with a trustworthy background in uncollateralized loans.
Far Wanderer
The New Bank of Far
#17 - 2014-02-28 05:39:02 UTC
Isis Nightshade wrote:
I honestly don't understand the fascination with banks in this game. They are just ISK Doubler spammers that take longer to take your money.
Meh.

Some of us just quietly run banks that provide a decent interest rate, to not all that many players, and otherwise go about our business playing the game.

@the OP: Banking, whatever form it comes in, takes time. Even if you keep it simple.

The time investment doesn't double when you add another feature to your bank; it's squared.

Banking, like EVE, is best when the person doing it figures out exactly what's fun about the activity, and then sticking only to that.

Anything else and you're just turning it into work/increasing the likelihood that you'll flame out (and so adding one more brick to the negative reputation wall that Nightshade sees every time the word "bank" is used).

This is why banks in EVE that work best are the ones that start small.

They are the ones that pay out quickly, reliably and above all earn for their customer an amount equal to that customer's initial investment as quickly as possible.

I really am wasting my breath though, when you can avoid questions from Hexxx and RAW23 like that you must have some seriously devoted investors. --Elizabeth Norn

Koniforous
Tauren Transit
#18 - 2014-02-28 06:12:25 UTC
Far Wanderer wrote:
Isis Nightshade wrote:
I honestly don't understand the fascination with banks in this game. They are just ISK Doubler spammers that take longer to take your money.
Meh.

Some of us just quietly run banks that provide a decent interest rate, to not all that many players, and otherwise go about our business playing the game.

@the OP: Banking, whatever form it comes in, takes time. Even if you keep it simple.

The time investment doesn't double when you add another feature to your bank; it's squared.

Banking, like EVE, is best when the person doing it figures out exactly what's fun about the activity, and then sticking only to that.

Anything else and you're just turning it into work/increasing the likelihood that you'll flame out (and so adding one more brick to the negative reputation wall that Nightshade sees every time the word "bank" is used).

This is why banks in EVE that work best are the ones that start small.

They are the ones that pay out quickly, reliably and above all earn for their customer an amount equal to that customer's initial investment as quickly as possible.


I enjoy reading your replies, Far Wanderer. Mostly because they are so wise and well mannered.

I would like to say that Eve is a sandbox game. And that means that if people enjoy role playing a bank manager, Eve will allow them to do that. It doesn't matter how you label their service, if they call it a bank, and believe it, and enjoy playing the game as such, it's a bank. This is where the fascination comes from. From the amazingly open world that is Eve.
Alexander wulfgard
Korrupted Gaming
#19 - 2014-03-07 15:57:59 UTC  |  Edited by: Alexander wulfgard
Many obstacles need to be passed before any forms of In- or out-game Banks emerge in New Eden. (considering RL definition of a bank)

The simplest form of Banking as RavenPaine state, consist of Lending. The Bank will borrow money via current accounts (fixed deposits, bonds and loans) and lend money to customers via Loan accounts (credit cards, bonds, syndicated loans etc…)
Additional RavenPaine points out that RL banks have the ability to lend out more money than what have been deposited (and typically also have a mismatch between tenors - borrow short; lend long).

Lets analyze these simple features:

1. The bank accept deposits from customers and most people are willing to use there services for following reasons:
Without a current account life would be difficult. You need it to receive salary and pay bills/taxes
Banks are considered safe – And they are safe because of Rules, regulations, transparency, accounting standards, bankruptcy laws and State guarantees.
Taking all these features into consideration a small customer can disregard almost all Risks which normally apply to investments; especially Credit Risk and Settlement Risk, and so willing to accept payment for the account or at best Zero/low interest on deposits.


2. Banks lend out money to customers:
Banks will lend to individuals and corporates based on credit worthiness/history.
Again rules, regulations and bankruptcy laws have a major impact on the credit assessment and the Risks the bank faces. This is why small limited companies typically will find it impossible to get a bank loan without collateral or personal guarantees.
Typically the credit assessment will result in the bank giving out the loan based on the government benchmark (yield curve) + Risks (where credit risk will be the major component)

3. Money creation & Tier capital
Banks are the main source of money supply and they create money out of nothing via loans.
Banking regulations such as Bank for International Settlements – Basel committee and Dodd Frank in US set up detailed standards of Capital ratios and such limit the banks availability to lend out unlimited.

Banks in New Eden:
EVE is a world full of Alts and combined with game mechanics the result is that punishments do not exist, so characters only face reputational risk.
There are no banking regulations, enforceable covenants & Investor protection, bankruptcy laws or state/ccp guarantees.
Only CCP can create ISK (see my threads about ISK here and here)
No benchmarks or yield curves exists and hence no liable way to price credit.
“Wallet” game mechanics make bank cash management & payment solutions obsolete.

In short, banks in New Eden are at worst Scams or Ponzi scheme and at best just a personal money lender with very little in common with a RL Bank.

I do believe that player operated banks should become a part of New Eden as it would add valuable content and differentiate Eve from other games in a revolutionary and innovative way.
First step would be to create a risk free benchmark and state backed securities market – see my post on the topic here
Far Wanderer
The New Bank of Far
#20 - 2014-03-07 20:18:44 UTC  |  Edited by: Far Wanderer
Alexander wulfgard wrote:
In short, banks in New Eden are at worst Scams or Ponzi scheme and at best just a personal money lender with very little in common with a RL Bank.
Keep in mind that just because your Benchmark and Securities thread was trolled to death by a bunch of howling jerks doesn't mean those jerks were right.

Banks exist in EVE. They take deposits. They allow withdrawals. They lend ISK. They invest.

Some of us do it part time (opposite our other EVE activities) and on a small scale.

But it is done.

Alexander wulfgard wrote:
I do believe that player operated banks should become a part of New Eden as it would add valuable content and differentiate Eve from other games in a revolutionary and innovative way.
I agree that adding some sort of banking mechanics into the game would be fun.

But at the same time the "rules and regulations" you talk about could make the game less risky.

And risk is where the fun is at.

Which is another way of saying that in EVE, (game) complexity must always be balanced by risk.

EDIT: Have you seen this proposal? It has some ideas about banks that might be well served by your serious evaluation and criticism.

I really am wasting my breath though, when you can avoid questions from Hexxx and RAW23 like that you must have some seriously devoted investors. --Elizabeth Norn

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