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SetrakDark
DarkCorp Citizens Holdings
DarkCorp Citizens
Posted - 2009.09.05 21:11:00 - [1]
 

Edited by: SetrakDark on 05/09/2009 21:24:08
Edited by: SetrakDark on 05/09/2009 21:17:11
This ended up being too big for the "frozen deposits thread". Hopefully it is worthy of its own thread.

ANALYSIS

1) I have no vested interest in this matter. This is all purely theoretical to me. That said, everything that follows is value-free; I am analyzing this from an economics/finance perspective.

2) The only thing stopping someone from stealing your investment or acting negligently with it is the value of their reputation or a personal sense of morality. EB legitimately owns all deposits, and only the directors’ own morality or reputational concerns will make them pay it back.

3) Considering point 2, the current proposals for the future of EB (total recovery and unlocking of deposits) must reflect one or some combination of both of these concerns. In the points below I will argue that neither of these concerns, nor any combination of them, will be best served by anything less than total dismemberment of EB and the return to depositors of as much value as possible.

4) My guess is that the current belief of the directors is that they can save the bank as an enterprise and meet their moral standards for what they consider to be the depositors’ best interest by “returning” the bank to a profitable state (though it is possible that no such state ever existed). To do so they will hold on to what is left of their assets and become an investment fund of sorts, gobbling up whatever potential income they can to fill the gap between assets and liabilities. This effort is flawed on numerous levels.

5) Foremost is the remote possibility of any significant recovery whatsoever, never mind the full recovery sought. According to available data only 53b is available for investment; the rest is already invested. Allowing for even extremely high (and unlikely) rates of return on new investments and the projected success of existing ones (including interest on outstanding loans), the bank is still only looking at income of less than 450b a year.

Furthermore, 160b of current loans seem to be non-performing (no interest accruing) and there is 70b in “other ventures”, which both raise the spectre of further defaults.

6) Regardless of the success of the recovery, the returns will never match what the majority of depositors could have achieved with control of their personal deposits. The best investment in Eve is in one’s own self in terms of skills, ships, etc. The missed opportunities of having these funds tied up for a year in market activities will far outweigh any returns.

Although some players’ deposits represent long term savings that would be invested in the market or unused, I am confident that many have short to medium term goals involving these funds.

7) The reputation of EB is unrecoverable. Even if the irresponsibility of the continued holding of deposits and recovery plan is ignored, the reputation of EB is such that the vast majority of depositors will attempt to withdraw their funds every time they are available, thereby causing a run on the bank. The bank run will force another freezing of deposits, and leave the bank with less capital to invest in the effort to fill the remaining gap.

Furthermore, as discussed, the attempt to recover in itself represents further miscalculation, thereby souring any theorized reputational benefit. Finally, EB was a broken enterprise model to begin with, and any successful reinvigoration of EB would be years behind rivals, assuming the banking model can, in fact, be made to work.

continued....

SetrakDark
DarkCorp Citizens Holdings
DarkCorp Citizens
Posted - 2009.09.05 21:20:00 - [2]
 

Edited by: SetrakDark on 05/09/2009 21:25:59
8) To summarize, should the directors wish to retain any reputation for financial responsibility and acumen or meet the moral goal of doing what is best for the depositors, they will begin the bankruptcy process immediately.

Not only is the possibility of recovery extremely unlikely, it also represents a further destruction of depositor value in terms of opportunity cost. Furthermore, any hypothetical reputation gain from a “recovery” of any magnitude will be vastly outweighed by the reputation loss from undertaking a financially, ethically, and even logically unsound plan.

I encourage the reader to continue reading the following BAKRUPTCY post detailing the process, as it addresses many of the issues raised in this post.

BANKRUPTCY

1) The bankruptcy process is an attempt to meet as many of the liabilities as possible by destroying the least amount of asset value in the liquidation process. In the case of EB, since we cannot apportion the assets according to stakeholder class (bondholders, shareholders, etc), we need another method of differentiating the investor types that make up the depositors as a whole.

Investors have different risk-preferences and time horizons, which is why the same revenue stream can have a different worth for different investors. For example, while many investors in EB were probably low risk and short time horizon, some of the biggest investors were likely slightly more risk tolerant and had indefinite time horizons. Liquidating all assets to meet the needs of the first type will significantly harm the second type who would be willing to wait things out.

Although EB can no longer bundle its investors to meet all their needs, it can still unbundle its assets, securitize them, and then let the different investor types sort themselves out using market mechanisms.

2) The first asset bundle would be a combination of all currently uninvested isk, income from investments, and any asset that can be sold at a premium to its expected return. This bundle serves two purposes: it is the “claim” bundle and it is the most liquid investment fund.

Every depositor has two months to claim their shares of this fund, thereby declaring their intention to collect their deposits. This process eliminates inactive depositors and signals the final share distribution for all funds. Over the two months when claims are being registered the fund is investing in short term and low risk activities. In addition to claiming their deposits, claimants also declare their intention to either hold or cash in their shares, and an according amount of cash is set aside for the end of the two month period.

Upon disbursement all shares may be traded but not cashed in until after a week or so. During this time the value of the shares will rise as the longer term/higher risk investors will pay more than the cash-in value for the shares because the remaining investment fund will be revenue-generating. A short period is then open for all shares to be traded for original cash value. This is then run like a normal investment corporation and all connection to EB is severed.

3) The second asset bundle would contain all of the stocks. The disbursement would occur like the first bundle, but there would be no cash-in (obviously). Again the price should rise as those interested in staying in the mutual fund will pay more for the mutual fund shares than the market value of the fund’s owned shares. Finally, if the market value falls below the liquidation value, a controlled liquidation and disbursement would ensue.

4) The third bundle would be very similar to the second, with those willing to stay until completion, and even beyond (think reinvestment), paying more than the value of hastily sold fixed assets. The only tricky issue would be the security of the assets themselves, but this would be a limiting concern and not a block to application.

continued

SetrakDark
DarkCorp Citizens Holdings
DarkCorp Citizens
Posted - 2009.09.05 21:28:00 - [3]
 

5) The final, and problematic, bundle would be the loans and other ventures. The outcome of the shares and corporate structure for this bundle are not as intuitively clear as the other ones.

My first instinct is that the dissolution of EB would disincentivize the repayment of the loans. On the other hand, EB may hold no real sway anyway and a new collection corporation may be the best way to recover the loans.

6) The most obvious objections to this action are the complexity and security. I would argue, however, that it is safer than the alternative and not as complex in application as it was to devise. The most important element is a thoroughly detailed plan for the division of assets and the structuring/operation of offshoot corporations. Fortunately, the vast majority of this can be done totally in the open; there is no need for secrecy and auditing like there would be in a closed operation. Furthermore the actual asset allocation and share dispersal could be done by one person.

The real legwork will be the staffing and structuring of the investment vehicles so they can become secure stand alone entities and the creation of a simple yet complete guide of the process so depositors are not overwhelmed or made excessively vulnerable to scams. However, all of this is doable by far less people than it takes to run a bank, and in a much more open and secure way.

I imagine there would also have to be a free brokerage service to facilitate the huge increase in trading for the month or so that this takes place.

7) The other objection would be to the division of assets. The idea of unbundling and securitizing the assets according to class is to expose their true value.

The current EB depositors represent a diverse variety of investor types; the new bundles allow all depositors to structure their assets in a way that best suits their particular situation, thereby maximizing the value of the assets for all. Keeping all of the assets together forces a lot of depositors to sell at a low price or hold an unattractive bundle of assets. On the other hand, forcing a fire sale will destroy much of the assets’ value and force long-term depositors to take a punishing percentage of their assets’ potential long-term value.

Yes, the rebundling is more complicated than either liquidating everything or selling shares in the whole operation. However, this method preserves by far the most amount of value and just might restore some faith in the investing community.

8) This is a rough outline and all comments and input is welcome. Even if it’s likely going nowhere, it was a lot of fun to do.

cosmoray
Perkone
Posted - 2009.09.05 21:57:00 - [4]
 

One of things I would do at EB is cancel ALL accounts with a balance under 10M ISK.
This would kill off many account holders who just set up an account but don't use it.

Administratively this would reduce account numbers by a huge amount.

SetrakDark
DarkCorp Citizens Holdings
DarkCorp Citizens
Posted - 2009.09.05 22:05:00 - [5]
 

Originally by: cosmoray
One of things I would do at EB is cancel ALL accounts with a balance under 10M ISK.
This would kill off many account holders who just set up an account but don't use it.

Administratively this would reduce account numbers by a huge amount.


Transforming deposits into shares would require some cut off point, if only for rounding. Either 1 or 10 M would be the logical choice.

Ray McCormack
Nordar Innovations.
Posted - 2009.09.05 22:17:00 - [6]
 

Originally by: cosmoray
One of things I would do at EB is cancel ALL accounts with a balance under 10M ISK.
This would kill off many account holders who just set up an account but don't use it.

That would be 4,978 accounts (not users, accounts) and 4,137,061,034.61 ISK.

Originally by: cosmoray
Administratively this would reduce account numbers by a huge amount.

I'm not sure I see how they are an administrative burden?

Dzil
Caldari
Caldari Independent Navy Reserve
The Fourth District
Posted - 2009.09.05 22:20:00 - [7]
 

I agree with the part of your message that the opportunity cost of allowing ebank to manage your money rather than reinvesting it privately is a net loss for some customers, and therefore further damages ebanks reputation. I would also add the following thoughts:

We can class those with frozen isk in ebank into three groups:

1. I want my money now, even if it's only a %age, so I can reinvest.

2. I want ebank to continue to manage my isk.

3. I'm away from the game and either don't know what's happening, or couldn't log in to do anything about it if I did.

Group 1 favors dissolving the bank. Groups 2 and 3 would likely prefer the bank remains. Group 3 is especially screwed as they really can't reinvest their money until they can return to the game.

So, I like the hybrid option. Figure out what's the fair %age, either based on assets or what the market will take. Cash out those that want to go out, and work with the remaining to rebuild what got scammed.

Ray McCormack
Nordar Innovations.
Posted - 2009.09.05 22:26:00 - [8]
 

Regarding the OP, I read most of it.

Please realise this is something that has been previously suggested and discussed between various board members. We are discussing alternate solutions to the issues you raise, such as allowing limited withdrawals and account sales.

The liquidation option has been raised with the staff; no one is for it, most are against it. We realise this isn't the popular decision, and quite honestly any decision will be met with as much public outcry as any other. We're in a no-win situation, doing what we deem is best.

We by no means feel we have all the answers, and it's possible we may not succeed to the degree we wish. But we're here to try, we'll make changes as we see fit and listen to suggestions raised; and hopefully with time we'll reach the desired positive outcome.

Ray McCormack
Nordar Innovations.
Posted - 2009.09.05 22:31:00 - [9]
 

Originally by: Dzil
Figure out what's the fair %age, either based on assets or what the market will take. Cash out those that want to go out, and work with the remaining to rebuild what got scammed.

We'll let the market decide the fair percentage, allowing people to cash out to speculators should they so desire. We're also aiming to open up partial withdrawals, allowing our profit to shrink our liabilities.

That's a lot of allowing.

HawkBlade
Posted - 2009.09.05 22:35:00 - [10]
 

Impressive post.

My first contribution was to report the three (3) trolling posts. Doesn't necessarily matter if we don't know who you are. If you make sense, you make sense.

My second comment, your post is not analysis.
It is opinion.

Well thought out but you present statements as forgone conclusions when in fact they are simply your opinion. Nothing wrong with opinion unless they are presented as something else.

Again, impressive post.

PS: Seriously, I reported them. Don't know if the op did or not but trolling has gotten to be a bit rampant around here. Doing my share to correct that.

cosmoray
Perkone
Posted - 2009.09.05 23:11:00 - [11]
 

Originally by: Ray McCormack
Originally by: cosmoray
One of things I would do at EB is cancel ALL accounts with a balance under 10M ISK.
This would kill off many account holders who just set up an account but don't use it.

That would be 4,978 accounts (not users, accounts) and 4,137,061,034.61 ISK.

Originally by: cosmoray
Administratively this would reduce account numbers by a huge amount.

I'm not sure I see how they are an administrative burden?



Administratively it makes life easier if it comes to paying out account holders or tarnsfroming into shareholders or other options. It is easier to deal with 1000-1500 accounts than 6000.
It is also easier for bundling accounts into packages which could be sold.

cosmoray
Perkone
Posted - 2009.09.05 23:17:00 - [12]
 

Originally by: Ray McCormack
Originally by: Dzil
Figure out what's the fair %age, either based on assets or what the market will take. Cash out those that want to go out, and work with the remaining to rebuild what got scammed.

We'll let the market decide the fair percentage, allowing people to cash out to speculators should they so desire. We're also aiming to open up partial withdrawals, allowing our profit to shrink our liabilities.

That's a lot of allowing.



To get closer to a "market value", we would have to wait for details of the EB audit and get a clearer number on the value of EB's assets.


This will give a point where the speculators can start offering buyouts.

glas mir
Reaction Scientific
Posted - 2009.09.05 23:18:00 - [13]
 

Originally by: HawkBlade
Impressive post.

My first contribution was to report the three (3) trolling posts. Doesn't necessarily matter if we don't know who you are. If you make sense, you make sense.

...

PS: Seriously, I reported them. Don't know if the op did or not but trolling has gotten to be a bit rampant around here. Doing my share to correct that.


I see your post as the troll in this thread, but I'll try not to derail the thread into the definition of trolling.


I am expecting EBank to present their plan of action (soon TM I guess). The first step when the gap was realized would be to stop it from increasing. Then you take your time and really analyze the options. I hope they will give those that want the isk now the chance to either sell their accounts or be paid the value of their account.

HawkBlade
Posted - 2009.09.05 23:39:00 - [14]
 

Originally by: glas mir
I see your post as the troll in this thread, but I'll try not to derail the thread into the definition of trolling.
Just check eve search to see the reference. Other than that, disagreement or negative opinion is not trolling.
Originally by: glas mir
The first step when the gap was realized would be to stop it from increasing. Then you take your time and really analyze the options.
To my understanding, this is exactly what is happening.
So much for all the drama eh?

SetrakDark
DarkCorp Citizens Holdings
DarkCorp Citizens
Posted - 2009.09.06 00:11:00 - [15]
 

Oh ya, I by no means meant to imply that it wasn't an opinion, just that my opinion is theoretical and not driven by any vested interest or axe to grind.

SetrakDark
DarkCorp Citizens Holdings
DarkCorp Citizens
Posted - 2009.09.06 00:30:00 - [16]
 

Originally by: Ray McCormack
reasonable response



I tried to make it as impersonal as possible, but it definitely lands "heavy" on the issue. However, it's all part of the game to me and I wish you and EB the best of luck.

Tekota
The Freighter Factory
Posted - 2009.09.06 09:01:00 - [17]
 

Originally by: Ray McCormack
Originally by: cosmoray
One of things I would do at EB is cancel ALL accounts with a balance under 10M ISK.
This would kill off many account holders who just set up an account but don't use it.

That would be 4,978 accounts (not users, accounts) and 4,137,061,034.61 ISK.

Originally by: cosmoray
Administratively this would reduce account numbers by a huge amount.

I'm not sure I see how they are an administrative burden?



That cutoff includes my account and personally I've got no problem with that at all (coming a few months earlier it could have been worse, up to about 10% of my NAV at one time). My only hesitation is that 10M is still a fair chunk to a very new character and my inner communist would like to see the little guys looked after a little better than the bigger fish (who should know better). Would it be possible, if this sort of thing were implemented, to introduce an "AND" clause of "account age > (eg) 3 months"?

Signore Kaeota
Caldari
Terra Incognita
Posted - 2009.09.06 09:13:00 - [18]
 

Originally by: Tekota
Originally by: Ray McCormack
Originally by: cosmoray
One of things I would do at EB is cancel ALL accounts with a balance under 10M ISK.
This would kill off many account holders who just set up an account but don't use it.

That would be 4,978 accounts (not users, accounts) and 4,137,061,034.61 ISK.

Originally by: cosmoray
Administratively this would reduce account numbers by a huge amount.

I'm not sure I see how they are an administrative burden?



That cutoff includes my account and personally I've got no problem with that at all (coming a few months earlier it could have been worse, up to about 10% of my NAV at one time). My only hesitation is that 10M is still a fair chunk to a very new character and my inner communist would like to see the little guys looked after a little better than the bigger fish (who should know better). Would it be possible, if this sort of thing were implemented, to introduce an "AND" clause of "account age > (eg) 3 months"?


I think someone earlier hit the nail on the head with this whole thing, give people a two or three month 'claim' period; eve mail the toons etc. if at the end of those two months no response has been forth coming, close and erase the account. This would serve to cut of the 'truly' inactive people, and may even save EB more isk in the end.

Aelisha
Gallente
Nisaba Syndicate
NISYN Inc.
Posted - 2009.09.06 09:39:00 - [19]
 

Very good thread, weell thought out, though admittedly personal opinion clearly stains it in parts - but on these issues, anyone truly impartial doesn't know what the hell they are talking about.

Thanks to Hawk for taking those trolls out to the garbage, you're completely right mate, they really have been a bane on this forum for too long, and swift moderation is a pleasant change.

But onto the topic at hand - I have little isk left in EBANK, and thus fall into the cut off, but also don't really care much about that isk, so feel I cannot really suggest a 'cut off' without being a little blase about it.

To this end I support the poster above, with the suggestion that a withdrawal limit that won't damage EBANKs remaining funds too badly be set at a rate that clears most of the tiny accounts, without just annihalating the accounts of small fish out of hand.

Big fish can roll the dice and withdraw a portion now, and wait forf closure later, or deal with the pennies to the pound dealers running about on this forum (we have moved thiose posts to the Buy/Sell/Trading forums right?).

I would like to stress thsat I am a relative newcomer concerning EBANK, and I admittedly have nothing of value left in EBANK. This is mainly a post to celebrate the clear thinking of the OP, the majority of posters, and Hawk's trash-cleaning.

Good day to you all

Aelisha

Skarii TuThess
East Aridia Trading Company
Posted - 2009.09.06 18:52:00 - [20]
 

I agree that it is a good idea to contact all account holders and give them 2-3 months to put in a claim as a creditor to the corp. Many people will have stopped playing, or simply don't care about the ISK.

I'd then agree that closing any account under x-million would ease administrative pressure. I think I stuck 1 or 10m ISK in EBank when it was first made for the coolness of having an account, and have done nothing with it since. I'm sure there are many people that have forgotten about this.


Ray, thanks for answering the number of accounts and ISK under 10m. What about those under 100m? Out of interest how much would your liability be reduced if every account had to forfeit the first 100m ISK?




To the OP - I think that is a very impressive post, but I think you re unfair in saying that people are better off investing the money in themselves as their own ships and skills can do better than anyone else. Whereas I agree with the validity of this statement I think it is unfair because if people were really going to do this then they would not have put their money into EBank anyhow. Some people just have too much ISK to use it all themselves, or are too lazy to use it. To suggest that they will be better off to have a cut of their money now I think assumes that they will use the money, and I don't think that everyone will.

Leneerra
Minmatar
Sebiestor Tribe
Posted - 2009.09.06 19:19:00 - [21]
 

I think a cut-off might be intresting, but not at the low end.
for instance use the deposit limit on accounts as the guaranteed amount
that way the clients that profited most will bear the biggest loss.
Only the intrest bearing accounts have a limit, so the sweep accounts would not be affected, so it would not hurt the people that deposited to support the bank.

However, should this be implemented, even thought I would technically get the isk I deposited back. I would feel scammed.

And perhaps if those smaller accounts are of so little impact to the total situation of the bank, then perhaps allowing those to withdraw and close their account, as to some of them it might be a lot of isk.

SetrakDark
DarkCorp Citizens Holdings
DarkCorp Citizens
Posted - 2009.09.06 19:39:00 - [22]
 

Originally by: Skarii TuThess
Whereas I agree with the validity of this statement I think it is unfair because if people were really going to do this then they would not have put their money into EBank anyhow. Some people just have too much ISK to use it all themselves, or are too lazy to use it. To suggest that they will be better off to have a cut of their money now I think assumes that they will use the money, and I don't think that everyone will.


Yup, that was actually dealt with in my post, and the point was reinforced in the bankruptcy section. However, the post is a lot to digest and its clarity isnt perfect. Therefore, I will explain my exact position on this specific matter.

A major attraction of a bank deposit is its accessibility. Although other factors, such as perceived security or simplicity, may have been important secondary or even primary factors, it is reasonable to assume that many people intended to have access to their money for personal (or even other market) investment.

The problem with the freeze and recover plan is that we'll never know. By forcing everyone to stay locked-in, EB is making the less likely assumption that more people (or total deposits) were not intending to use that money for more than a year (I'm not saying they thought this explicitly, but in terms of the impact on the depositors it is implied).

The driving force behind my solution was to let every depositor structure his share of the assets in a way that best suited his current situation, whether that be personal investment, market investment, investment in one's corporation, or even jus letting it sit in their wallet. I wont reiterate the solution here, though I will clarify any issues you may have with it.


Brock Nelson
Posted - 2009.09.06 20:10:00 - [23]
 

Originally by: Ray McCormack
The liquidation option has been raised with the staff; no one is for it, most are against it. We realise this isn't the popular decision, and quite honestly any decision will be met with as much public outcry as any other. We're in a no-win situation, doing what we deem is best.


I'm curious, is this EBank's money or customer's money? Because it seems that you guys are weighing the staff's opinion more than the public opinion...

Skarii TuThess
East Aridia Trading Company
Posted - 2009.09.06 22:04:00 - [24]
 

Edited by: Skarii TuThess on 06/09/2009 22:16:59
Setrak:
Ah sorry I should have been clearer - although I feel that part of your analysis was a little unfair I don't think it significantly detracts from your solution, which I think is as solid as any other I have read.



Leneerra:
It's an teresting suggestion to cut it at the cap. I think the overall impact is less damaging however if done at the low end. I imagine that there are very few players that could not absorb the loss of 100m ISK. However losing several billion would have a heavy impact on all but very few people. We know that EBank do not have the funds to give everyone their ISK back, so they have to be realistic at this point. If they do go via the liquidation route I think they should select the option that has the least impact upon the players. Personally (and other people may have perfectly valid differing opinions) I feel that this could be through taking ISK at the low end (depending on the results).



Brock:
I think that you make a very important point. One of the things that must be going through the minds of the directors of EBank is the best way to salvage their reputations. Now this is a good thing because if they didn't want to protct their reputations they would just say "sod it" and take the ISK for themselves.

The problem is that this feeling may not fully align with what is best for teh account holders. The account holders might feel "ok you messed up, I accept that investing anywhere is a risk so I'm big enough to take the loss, but give me my money back now" - a feeling that does not give the directors the opportunity to redeem themselves. The directors may feel that they want to try and return a larger portion of the account holders ISK, but doing so over a longer time. This gives them the ability to claim that they salvaged the situation.

I'd like to clarify that I am not accusing any of the directors of doing this myself - I have nothing to back up that line of thinking either way. But I do think that it is a possibility that others will consider.

iP0D
Posted - 2009.09.06 22:08:00 - [25]
 

Originally by: Brock Nelson
Originally by: Ray McCormack
The liquidation option has been raised with the staff; no one is for it, most are against it. We realise this isn't the popular decision, and quite honestly any decision will be met with as much public outcry as any other. We're in a no-win situation, doing what we deem is best.


I'm curious, is this EBank's money or customer's money? Because it seems that you guys are weighing the staff's opinion more than the public opinion...


@ Brock. Next you're going to tell us this surprises you. Come on. Both aptitude and attitude of perspectives go hand in hand with the business. Real life or pixels, makes no difference.

@ Ray. There are plenty options, just none that will provide a complete accountancy for a win situation. If anything, you always have to options for just mapping out what can be mapped out, re valuing by ratio for that what is accounted for to accounts, set a lockdown timer for accounts (bank state transition management) and declare the rest toxic.

At that point work can begin again, and anything which over time pops up, is found, is made healthy should be applied to by ratio value additions to accounts which are accounted for, appraised and not in trouble with the hand of god.

Not that hard, but it does require a different angle. Continuing to piece together everything, much of which can never be disclosed or even accounted for (and not just because of Ricdic, hand of god accounts for something as well aside of normal business hickups and mishaps) is not productive and will never provide a sense of closure which will also provide a sense of continuation. The sense of closure and continuation is never an easy sentiment to appreciate in high finance, but ultimately it is the foundation for business. Just look at what keeps things going when economics bursts or bites .. trust. Which for 90% of people is akin to sentiment, and not math.


Cailais
Amarr
Nasty Pope Holding Corp
Talocan United
Posted - 2009.09.06 23:24:00 - [26]
 

From an outsiders perspective you're approaching EBANKs perceived problem in the wrong way.

Banks dont work in EVE because they are entirely trust based. I give you my ISK on the basis that I trust you to invest it wisely and give me a return on that investment.

You loan me ISK because you trust me to pay it back (+interest).

At no stage is anything enforceable (unlike the real world): and this works both ways i.e. Ricdics theft changes nothing.

So, you simply carry on (if you so wish) and hope players maintain their trust in your service. Now you'll assume a run on the bank, and anticipate that this cant be met (with your current balance) so you don't open the flood gates but put in place a 'soft landing' by limiting withdrawals by quantity over time. You reduce the promised interest payment - again staggered over time; the longer an account is maintained the higher the provided interest rate (up to its original level at say 1 year).

This will provide you with a working capital (possibly shrinking) to invest for those who place long term faith in the bank, whilst allowing doubters to withdraw their investment by degrees.

Eventually you should end up with a restoration of trust and re investment into the 'bank' - on the basis that there is no equivalent service on your scale.

C.


Amarr Citizen 155
Nordar Innovations.
Posted - 2009.09.07 02:03:00 - [27]
 

Originally by: Skarii TuThess

Brock:
I think that you make a very important point. One of the things that must be going through the minds of the directors of EBank is the best way to salvage their reputations. Now this is a good thing because if they didn't want to protct their reputations they would just say "sod it" and take the ISK for themselves.



As an Ebank director, I can tell you this paragraph couldn't be more wrong. I'm not doing what I'm doing for the sake of reputation, anyone that knows me knows that. I'm doing it because its the right thing to do. Some people carry their real life principles into Eve with them and some people don't. There is no right or wrong way to play Eve, but I choose to act the same in Eve as I do in real life.

cosmoray
Perkone
Posted - 2009.09.07 05:33:00 - [28]
 

Originally by: Amarr Citizen 155
Originally by: Skarii TuThess

Brock:
I think that you make a very important point. One of the things that must be going through the minds of the directors of EBank is the best way to salvage their reputations. Now this is a good thing because if they didn't want to protct their reputations they would just say "sod it" and take the ISK for themselves.



As an Ebank director, I can tell you this paragraph couldn't be more wrong. I'm not doing what I'm doing for the sake of reputation, anyone that knows me knows that. I'm doing it because its the right thing to do. Some people carry their real life principles into Eve with them and some people don't. There is no right or wrong way to play Eve, but I choose to act the same in Eve as I do in real life.


I have to call out the EBANK directors on this.
Is this the right thing to do?
Have you taken outside opinions?
Have you sampled a group of account holders with large balances, asking them what they would like to happen?
Have you launched a thread on MD asking for input from account holders (all threads so far have just provided information, not soilicited feedback)?

At present the EB directors are taking a course of action that THEY think is the correct course.

The current consensus of opinion of account holders tends towards liquidation at whatever percentage is left of the bank, as they would rather use a small percentage than let it sit for a year.

You guys need to ask your customers what they want, so far you haven't. If you EB board wishes to keep the money (in limbo), then this will just be an ego trip (proving that they can succeed) when the public (customers) want out.

Drab Cane
Carbenadium Industries
Posted - 2009.09.07 06:18:00 - [29]
 

In the process of transferring accounts to speculators that have purchased them on the cheap, I was wondering what kind of benefit EBank could get from the transfer. How about . . .

Account Transfer Fees:

To assist the bank with liquid ISK, the bank could charge a fee when transferring an account to another player. This fee would be 10% of the account's balance, payable to EBank by the person receiving the account. Note that the fee would actual ISK transferred to the bank, as opposed to just deducting from the account's balance.

This would help the bank, and the speculators would still make a tidy profit.

Nairb Ecrep
Mercurialis Inc.
RAZOR Alliance
Posted - 2009.09.07 06:23:00 - [30]
 

Edited by: Nairb Ecrep on 07/09/2009 06:24:24
For what its worth, I tend to agree with cosmo here. This isn't Ebank's money, and this wasn't an IPO or a bond. It was suppose to be a bank, something that gets to use other people's money while they aren't using it. While personally I have no isk in Ebank atm, I think the account holders should get to decide the outcome, not the board of directors, and I'll tell ya why, it's their money!

People didn't deposit their isk to further Ebank, and having the board hold on to Isk that account holders want back (to further ebank's continuation) is wrong. Account holders should ultimately be able to decide the fate of their money, because it's their money. This wasn't suppose to be a loan, or "investment" in the IPO sense, it was suppose to be someone holding money.

The bright side of people who are willing to take $0.30 on the dollar (or whatever) is that you (ebank) gets to drastically reduce its liability and give its customers what it wants. Say you get to write down 50% of the isk you're short, and you do it at the customer's request. Now instead of having to make back 1.2T, it's 600B, and sounds like a pretty good deal.

One other comment here as well, I feel that interest shouldn't be turned off. If the bank is insolvent then it should close and divide up remaining assets to its account holders. If the bank is still functioning but withdraws are frozen, interest should continue to be calculated and credited. Seems a bit of having your cake and eating it too.

Just my thoughts on the matter, for what it's worth. While I don't 100% agree with the actions taken, I do have to tip my hat to the people who are trying their best to resolve this crisis. My observations might be incorrect and you're following the best path, or visa versa, but either way you're in the trenches doing the best you can with what you have, and for that I think you should feel proud (and know you have the community's respect).

Nairb

edit: grammar


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