Market Discussions

What EVE Currently lacks isn't oversight. It isn't hard-coded mechanics or a lack of GM enforcement of 'good practices' as we see in other MMOs.

What's required for a banking sector (and really, any large-scale financing sector) is an efficient and transparent way of managing risk. Hexxx himself has said that EVE is a game of 'risk management' not 'trust management'. The bottom line in the real world is that you put your trust in the government that it won't collapse, in the banks that they'll give you the money you ask for when you ask for it, and that the system works.

I could see an FDIC type organization going up in tandem with a banking sector -- an additional entity which serves as an 'insurer' to banks and their clients' accounts (presumably up to a certain amount). Audit this thing frequently, and it should work as intended -- should any banking entity implode on itself either through financial mismanagement, or from a player 'cashing out' those deposits would be insured (again, up to a certain amount) by the insurer.

Moreover, such an entity would serve as a risk mitigator -- more banks would open, and it would even behoove the players themselves to open multiple accounts across a few banks in order to keep as much of their ISK 'insured' as possible.

To reiterate -- EVE's banking sector needs a depositor protection foundation to mitigate risk.

It removes it entirely from the banking process. With frequent audits and oversight from trusted third parties, it serves as a pool which the banks 'buy into'. The individual depositor would not be interracting with the insurer, but the bank itself would be. The risk is then on the bank, not the depositor. It is in the Bank's best interest to be insured, as depositors wouldn't otherwise deposit without financial insurance (so-to-speak). Combined with the bank's own reserve of 'run money', risk is minimal, especially at smaller ISK amounts.

Even in the real world, there are plenty of points of failure, and when you notice your money is a fiat currency, the first point of failure is right there in your wallet. The trick is transparency and oversight. Since CCP is out of the question in terms of oversight, you turn to trusted third parties.

My point being, there was a bank and it did nothing to solve the purported problem. It also calls into question the original assumptions and conclusions in the devblog, namely, that there was no banking sector. Having a bank didn't solve the problem. So I don't see how 'banks we need them.' Banks we had them. The banks they do nothing.

Right, so not only do I have to worry about my bank running away with my money, now my bank has to worry about his bank running away with his (my) money.

What you guys don't grasp here is that you're working against an inherent tendency towards disorder in these artificial and foundationless institutions that you're imagining. Inherent in every "check and balance" you're imagining is a human point of failure, whether that's planned dishonesty, incompetence, negligence, burnout, ennui, real-life demands...the list truly goes on and on. Complex institutions work in real life because we organically develop social and legal systems of incentives, the allocation of rewards and punishments.

For all the potentialities inherent in the entire Eve market, all that wealth and productive potential you guys hope to engineer organizations to unleash and capture, you can't currently create the incentive for one auditor, VV does it voluntarily. Why? Because after the first few days, playing space bureaucrat #473 is ******* boring as snot and financially unrewarding.

If you want to engineer interesting new things in this game (and I am all for that, I have seen some amazing ideas in my time following this forum), then you need to look at the basic mechanics that you have to work with, not try and transplant the form of real life organizations without understanding their basic function and how they organically developed from those basic functions to take on the structural form you see today.

Anything that isn't based on a realistic appraisal of the limits of incentives in Eve interactions is doomed to hilarious and catastrophic failure, and the more complex and grandiose the structure you attempt to create, the more hilarious and catastrophic that failure.

The interesting thing about hex is he knows this, though I'm not sure if this is consciously or subconsciously. He knows that these imaginings won't exist for a second based on their inherent interactive qualities, so he has to create an excitement surrounding them, and that excitement is based on this ill-conceived notion of transplanting form and structure "whole-hog" from the real world. Unfortunately, when the excitement wears off, and the cruel realities of inherently illogical space bureaucracies kick in, he's long gone, and it's everyone else left cleaning up the mess.

I'm in it for the discussion, it's fun. Don't harm my fun with your dose of reality please! :)

Where do you think Banks get their money?

IMF
Federal Reserve

Nonresponsive.

If you are refrencing the idea I've been discussing, the Clearing House, then this is not correct.

The Clearing House would only be holding enough ISK to balance accounts for the duration of a given settlement period. By the end of the settlment period, the House should not be holding any ISK on behalf of any one.

If you're refrencing the idea above where someone mentioned the FDIC, then I agree, that's not a very good idea as it creates too much moral hazard IMO.

Then it's the same, another equivalent point of failure.

Unfortunately, no central bank in the traditional sense could be introduced to EVE without CCP hard-coding it in.

Central banks (Federal Reserve, Bank of England, etc.) are the origins of all money that enters their respective economies. Usually this process is heavily regulated in a way that limits the amount of currency creation so inflation does not occur. But the point is that, in times of crisis, a central bank can in fact create money out of nothing and loan it to a private commercial bank that might have otherwise failed because of a lack of liquidity for debt obligations.

Unless something seriously changes in the EVE universe, CCP is not going to hand over to the players the capability to directly create money.

(Darth Tickles: If you look over this forum thread, I believe I have shot down a lot of suggestions that are unrealistic and held up the realistic suggestions that could not only improve the game, but could be executed fairly easily.)