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Josephina Marco
Posted - 2010.07.08 15:26:00 - [1]
 

and for real bank i mean a corporation/group/person/etc. that will accept deposit at an interest X% and that will lend ISK at an interest (X+Y)%. Because as far as I understand there are enough corporations/groups/persons/etc. that have the financial power to do such a thing

Dramaticus
GoonWaffe
Goonswarm Federation
Posted - 2010.07.08 15:30:00 - [2]
 

send me your isk and i will double it

Agente
Posted - 2010.07.08 15:30:00 - [3]
 

/Me thinks you need to read some EVE history. :-)

Cista2
Hydra Investment Fund
Posted - 2010.07.08 15:51:00 - [4]
 

Originally by: Josephina Marco
and for real bank i mean a corporation/group/person/etc. that will accept deposit at an interest X% and that will lend ISK at an interest (X+Y)%. Because as far as I understand there are enough corporations/groups/persons/etc. that have the financial power to do such a thing
There have been several large banks in Eve, most notably EIB, Dynasty and Ebank, and they all ended with massive scams. Some claim Ebank is still alive. Nevertheless, starting up a new bank is something few have the guts to try.

Darth Tickles
Origin.
Black Legion.
Posted - 2010.07.08 16:00:00 - [5]
 

There are banks. However, they wisely avoid both taking deposits and making unsecured loans, which are both terrible ideas. Instead they borrow for fixed periods at one rate and lend secured by collateral at a higher rate.

Ray McCormack
Nordar Innovations.
Posted - 2010.07.08 16:43:00 - [6]
 

The simple answer is that EVE doesn't mirror the credit requirements, and therefore the financing mechanisms, that exist in modern life. Due to the ease with which self-finance is perpetuated there is minimal, even insignificant demand for credit and a much higher proportion for savings. I would go so far as to say there is an unbelievably high bias towards savings, but self- or private-investment skews the available public ratios we have (at lolbank this has historically been 10:1 in favour of savings).

Want to hear the complex answer?

Hexxx
Minmatar
Posted - 2010.07.08 17:25:00 - [7]
 

Originally by: Josephina Marco
and for real bank i mean a corporation/group/person/etc. that will accept deposit at an interest X% and that will lend ISK at an interest (X+Y)%. Because as far as I understand there are enough corporations/groups/persons/etc. that have the financial power to do such a thing


Time has proven that the technology is a bit tough to tackle. I'll explain.



Most people know how to pull the API, throw it in a database, and query the database for the results. But Banks need more. Few people have been able to build the technology (and even when they do, sometimes it fails spectacularly - Dynasty Bank for example) that a Bank would require.

Even if you do have the technology though, it's been proven that Loans aren't a great way for a Bank to make money.

Oh, then there's actually accounting for all the money the Bank has...another very hard to do thing. In all this time I've seen only one person do it decently -- a private Bank that ultimately failed.

Faccat
Posted - 2010.07.08 17:44:00 - [8]
 

Money supply.

In Eve, a bank can only loan an ISK that is has. To make a 1 Billion ISK loan, the bank needs 1 Billion ISK deposit. More than that in fact because it will need enough to cover interest rates on the deposits.

A real bank can loan out far more than it has in deposits. They take in $200,000 in deposits at 2.25% interest and then make 4 home loans at 5% interest.

Collateral.

Eve collateral has to be handed over and loses its utility value for the owner during the time of the loan.

The real collateral exchange is only by title with a real loan. It is possible to claw back a house or car from a loan. It is also possible to go after a person in real life where evasion in Eve is as simple as logging out or moving somewhere else, or the extreme case of just becoming someone else.


I can't conceive of a game allowing players to work with a leveraged money supply.

Perhaps something could be done with collateral. Maybe an item could be bound to a station and flagged so that it can't leave a particular station until a certain chain of events occurs. This way a BPO, for example, could still be used to produce and used as collateral. It wouldn't help with anything which needs to be used in space, though, as that always faces the possibility of destruction.

Perhaps contracts would be tied to security standing (for a fee, of course). Someone failing to meet the terms of a contract would lose standing and truly become an outlaw. Imagine trying to draw up a contract that provides a standing loss with every faction in game just to be sure. A player could still sell that character and buy another.


SencneS
Rebellion Against Big Irreversible Dinks
Posted - 2010.07.08 18:13:00 - [9]
 

Edited by: SencneS on 08/07/2010 18:13:57
Originally by: Hexxx
Even if you do have the technology though, it's been proven that Loans aren't a great way for a Bank to make money.


I'd lean on not great but required.

One of the biggest internal pressure points in EBANK was payroll. "We're all doing this stuff why are we not getting paid." comments on pretty much everyone in EBANK in the past. The problem is ventures make ISK but leave a sour taste in the mouth of the person doing them, because they could do them and get ALL the ISK for themselves.

Banks in EVE need to generate profit from other much more passive sources or they'll eventually pull a Ricdic who.. And I'll quote him here from that MSN Log.. "[09:32:34] Ricdic: so after all the crap i decided i was sick of giving, and started taking"

So things like Shares, Bond investments, Loans, passive market speculation, lottos, selling services etc is what in my opinion any bank more stable. The issue there is, it comes with a lot of risks, and the interest is just not good enough.

So ventures are introduced to generate a little more, they can feed the interest by themselves but the social aspect of running a bank made up of nothing but ventures is dangerous.

Eulalinda
Posted - 2010.07.08 20:01:00 - [10]
 

Edited by: Eulalinda on 08/07/2010 20:09:30
Originally by: Josephina Marco
and for real bank i mean a corporation/group/person/etc. that will accept deposit at an interest X% and that will lend ISK at an interest (X+Y)%. Because as far as I understand there are enough corporations/groups/persons/etc. that have the financial power to do such a thing

Because there is no REAL accountability in Eve, i.e. no way to enforce any agreement. You can't imprison someone for fraud in Eve, nor can you seize their assets once they're convicted in court. Most importantly, there's no fear of permanent death in Eve.

No real consequences = No real bank

Kyanse
Posted - 2010.07.08 20:06:00 - [11]
 


United Bank of EVE will accept your ISK and send you due interest payout every month on the 1st.

If you wish to be a customer then first please send the amount you wish to deposit. We will contact you short after the initial deposit.

Minimum deposit: 1M ISK.

Monthly interest: 3.0% for accounts under 10B ISK and 2.4% for accounts over 10B ISK.

Please send your deposit to Kyanse.

Hexxx
Minmatar
Posted - 2010.07.08 20:12:00 - [12]
 


Originally by: Eulalinda
Originally by: Josephina Marco
and for real bank i mean a corporation/group/person/etc. that will accept deposit at an interest X% and that will lend ISK at an interest (X+Y)%. Because as far as I understand there are enough corporations/groups/persons/etc. that have the financial power to do such a thing

Because there is no REAL accountability in Eve, i.e. no way to enforce any agreement. You can't imprison someone for fraud in Eve, nor can you seize their assets once they're convicted in court.

No real consequences = No real bank


People have been banking since the third millennium B.C. I don't need to tell you that there was no FDIC back then -- not to mention banking regulations. Even more recently, the Bank of the Medici in Florence had no real regulation to contend with. Accounting was done out of necessity, not government mandate.

The Medici Banks gave loans to nobility. Can you guess what kind of enforcement an Italian bank had at it's disposal when the King of France defaulted on his loans? (hint: nothing)

No real accountability in EVE? How about no real accountability for the majority of Banking's history, that doesn't make them "not real" Banks though. Wink






SetrakDark
DarkCorp Citizens Holdings
DarkCorp Citizens
Posted - 2010.07.08 20:20:00 - [13]
 

*shakes fist at king of france*

why i oughtta...

Jagga Spikes
Minmatar
Spikes Chop Shop
Posted - 2010.07.08 20:23:00 - [14]
 

Originally by: Hexxx

Originally by: Eulalinda
Originally by: Josephina Marco
and for real bank i mean a corporation/group/person/etc. that will accept deposit at an interest X% and that will lend ISK at an interest (X+Y)%. Because as far as I understand there are enough corporations/groups/persons/etc. that have the financial power to do such a thing

Because there is no REAL accountability in Eve, i.e. no way to enforce any agreement. You can't imprison someone for fraud in Eve, nor can you seize their assets once they're convicted in court.

No real consequences = No real bank


People have been banking since the third millennium B.C. I don't need to tell you that there was no FDIC back then -- not to mention banking regulations. Even more recently, the Bank of the Medici in Florence had no real regulation to contend with. Accounting was done out of necessity, not government mandate.

The Medici Banks gave loans to nobility. Can you guess what kind of enforcement an Italian bank had at it's disposal when the King of France defaulted on his loans? (hint: nothing)

No real accountability in EVE? How about no real accountability for the majority of Banking's history, that doesn't make them "not real" Banks though. Wink




there was always knee-breaking clause in history. none of that in EVE.

Hexxx
Minmatar
Posted - 2010.07.08 20:35:00 - [15]
 

Originally by: Jagga Spikes

there was always knee-breaking clause in history. none of that in EVE.



You had to find the offender. It wasn't like you could post an APB.

Hey, sounds like EVE!

Jagga Spikes
Minmatar
Spikes Chop Shop
Posted - 2010.07.08 21:01:00 - [16]
 

Originally by: Hexxx
Originally by: Jagga Spikes

there was always knee-breaking clause in history. none of that in EVE.


You had to find the offender. It wasn't like you could post an APB.

Hey, sounds like EVE!


oh, come on! you can do perfectly non-tracable transactions in real life? you can keep running business from perfect security? in real life everything has a price. in EVE some things just can't be done.

Hexxx
Minmatar
Posted - 2010.07.08 21:17:00 - [17]
 

Originally by: Jagga Spikes
Originally by: Hexxx
Originally by: Jagga Spikes

there was always knee-breaking clause in history. none of that in EVE.


You had to find the offender. It wasn't like you could post an APB.

Hey, sounds like EVE!


oh, come on! you can do perfectly non-tracable transactions in real life? you can keep running business from perfect security? in real life everything has a price. in EVE some things just can't be done.


You telling me those things were all possible for the Banks of Florence in the 1600's?Very Happy


Jagga Spikes
Minmatar
Spikes Chop Shop
Posted - 2010.07.08 21:35:00 - [18]
 

i'm saying that King of France was just a mortal human, that couldn't wire his debt worth to anonymity.

Eulalinda
Posted - 2010.07.08 21:50:00 - [19]
 

Edited by: Eulalinda on 08/07/2010 21:54:22
Exactly.

As a trader, I spend nearly 100% of my EVE life in a station where I'm 100% immortal. There's no penalty for scamming or defrauding someone. There are no "REAL" banks in Eve because there are no "real" threats because the real government in Eve (i.e. CCP) has provided thousands of sanctuaries (i.e. stations) for even the most universally hated players.

Krathos Morpheus
Legion Infernal
Posted - 2010.07.08 21:53:00 - [20]
 

Originally by: Hexxx
You telling me those things were all possible for the Banks of Florence in the 1600's?Very Happy
Anonimity and virtual identities make a huge difference, as well as it does the possibility of log off, unreachability of assets and possesions, as well as the lack of homes and stablishments. The risible consecuences help a lot too, in the real world you have one life, in eve you can die and laugh with your money still intact in your digital wallet. You can not been imprisoned also. Even finding the offender makes no difference in the game.

Don't you see the stupidity of comparing eve to real life at this level yet? Kings and nobles get their money here too though, reputation is valid, but in eve, those reputable enough get stupidly low interests unsustainable for a bank (given the limited supply of those) and still too risky for the bank as eBank has proven with it's defaulting loans.

All this let us with only collateralized loans as a secured viable business and limitations of those on eve have been already exposed, limiting the number of possible loaners considerably. For a successful approach to this business I would look at cosmoray business, no need of a bank for that.

Companion Trollin
You are going too fast
Posted - 2010.07.09 03:14:00 - [21]
 

Originally by: Josephina Marco
and for real bank i mean a corporation/group/person/etc. that will accept deposit at an interest X% and that will lend ISK at an interest (X+Y)%. Because as far as I understand there are enough corporations/groups/persons/etc. that have the financial power to do such a thing

The simple answer is that EVE has zero accountability. There are no laws to enforce any bank giving your money back, so no bank ever will.

Halcyon Ingenium
Caldari
Bene Gesserit ChapterHouse
Sanctuary Pact
Posted - 2010.07.09 07:05:00 - [22]
 

Edited by: Halcyon Ingenium on 09/07/2010 07:06:15
All a bank can do in EVE, much like most of banking history, is not loan to those who default. Maybe also hire a merc corp to do some damage, which costs more money and is dubious in its success.

This highlights something about banks and why they will not work in EVE. In banking, and in business in general, one of the, if not THE, primary element to banking/business is trust. If no one trusts anyone, no banking or business happens. By extension, if there are no ways for individuals to settle a business/banking dispute, i.e. court system, then no trust and no business/banking.

Two things EVE lacks to make banking viable.

1)Trust - few people trust anyone but their own, some don't even trust their own.
2)Court system - no way to arbitrate disputes, no way to compel someone to submit to the arbiters decision.

This is barring consideration of game mechanics concerning capitol, which also make banking not worth the time or effort.

Party Grinder
Posted - 2010.07.09 11:50:00 - [23]
 

Originally by: Halcyon Ingenium

Two things EVE lacks to make banking viable.

1)Trust - few people trust anyone but their own, some don't even trust their own.
2)Court system - no way to arbitrate disputes, no way to compel someone to submit to the arbiters decision.



Exactly. So if you want to compare to RL banks you'll have to do it with banks from Middle Age or earlier. Which were mostly used to store money safely and trade safely without having to around tons of coins. And both are useless in a world like New Eden where you only use electronic cash.

And all the loans from MD are pretty much the best if will ever get in Eve. Pretty much like those Middle Age banks weren't doing loans to random individuals, you'll only get a decent one if you can provide some trust : full API key to be audited (so investors can be assured that you're really doing business - not just setting up a ponzi scheme), collaterals to make them feel safe about it, being a known pilot (at some point, you would need a lot of ISK to make it worth destroying your reputation) or having a nice history of successful investments.

Gabriel Virtus
hirr
Posted - 2010.07.09 12:31:00 - [24]
 

Originally by: Hexxx

Originally by: Eulalinda
Originally by: Josephina Marco
and for real bank i mean a corporation/group/person/etc. that will accept deposit at an interest X% and that will lend ISK at an interest (X+Y)%. Because as far as I understand there are enough corporations/groups/persons/etc. that have the financial power to do such a thing

Because there is no REAL accountability in Eve, i.e. no way to enforce any agreement. You can't imprison someone for fraud in Eve, nor can you seize their assets once they're convicted in court.

No real consequences = No real bank


People have been banking since the third millennium B.C. I don't need to tell you that there was no FDIC back then -- not to mention banking regulations. Even more recently, the Bank of the Medici in Florence had no real regulation to contend with. Accounting was done out of necessity, not government mandate.

The Medici Banks gave loans to nobility. Can you guess what kind of enforcement an Italian bank had at it's disposal when the King of France defaulted on his loans? (hint: nothing)

No real accountability in EVE? How about no real accountability for the majority of Banking's history, that doesn't make them "not real" Banks though. Wink








People in Eve have nothing to lose with complete anonymity. People in the real world always have something to lose. There is accountability in real life for worthless bankers and worthless debtors, but none in Eve. Accountability != to secured deposits.

Mme Pinkerton
The pink win
Posted - 2010.07.09 12:44:00 - [25]
 

Originally by: Party Grinder
Pretty much like those Middle Age banks weren't doing loans to random individuals, you'll only get a decent one if you can provide some trust


I am no expert on the subject of the medieval banking system, but as far as I know you can basically split their activities into two categories: providing easy liquidity to merchants (coinless payment via bank notes, credit lines) and providing (big) loans to states/monarchs.

Back then sovereign default in one form or another was not uncommon at all and at least on paper the bank had no recourse whatsoever against this creditor.
Saying that banks lent governments money because they simply "trusted" them would be akin to saying that these bankers were incredibly naive.

Their security was that they (and only they) had the means to provide future credit when needed - while trying to appropriate the necessary funds directly from their owners would be tedious for the government and probably not too successful.

The only thing keeping a state (somewhat) honest is its inability to maintain a balanced budget.

Maybe the king decides to default on the country's debts today - but if he does this it just means he will have to pay them tomorrow in order to get access to new credit.

You see this at work in the (heated) debate over the acknowledgment of Tsarist debts after the Russian Revolution (the Bolsheviks made the offer to acknowledge the Russian debt in exchange for guaranteed access to new credit), you see this in Argentina's increased efforts to negotiate a settlement with its creditors earlier this year (trying to dismiss the president of its central bank, so they could use the currency reserves to pay back the old creditors) and I am entirely positive things worked exactly the same way during the middle ages.

This mechanic does not work for your usual MD loans.

Packtu'sa
Nabaal Construction and Industrials Corp
Nabaal Syndicate
Posted - 2010.07.09 17:43:00 - [26]
 

In the real world, the average person needs a bank account to facilitate transactions. Checks, electronic transfers, and debit cards are superior methods of payment to cash. The interest earned is often insignificant.

In EVE, banks actually make it more difficult to access your money. Even ignoring all of the law enforcement issues described above, the only compelling reason to open a bank account is to earn interest.

If out-of-game organizations were more common, I could see a more viable banking role emerge, but as it is we're better off just dealing with investments.

Ray McCormack
Nordar Innovations.
Posted - 2010.07.09 18:14:00 - [27]
 

Originally by: Packtu'sa
the only compelling reason to open a bank account is to earn interest.

Or default on a loan, right?

Taram Caldar
Royal Black Watch Highlanders
Warped Aggression
Posted - 2010.07.10 14:09:00 - [28]
 

LOL

There have been many banks in EVE. Unfortunately with no way to police them every single one has either been a scam from the start or wound up turning into a giant scam eventually. Even EVE Bank wound up scamming it's suckers... err... customers... out of all their money.

Banks don't work in EVE.

Otto3d
Caldari
Aerospace Corporation
Posted - 2010.07.10 20:41:00 - [29]
 

You know why there will never be a successful bank? It is because people cannot be trusted, there is no consequences or law in EVE. Who is there to punish somebody who takes a loan but doesnt give it back? Certainly not CONCORD, you can place a bounty but that only works if they leave 0.4 sec space. No law or order means no civilized banking system.

Hexxx
Minmatar
Posted - 2010.07.10 21:23:00 - [30]
 

Originally by: Otto3d
You know why there will never be a successful bank? It is because people cannot be trusted, there is no consequences or law in EVE. Who is there to punish somebody who takes a loan but doesnt give it back? Certainly not CONCORD, you can place a bounty but that only works if they leave 0.4 sec space. No law or order means no civilized banking system.



Oh, you mean like collateral? Very Happy



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