Collateralized loans are actually a large market by isk volume, and they function very well. In addition you could probably increase the market size by many orders of magnitude with an aggressive marketing campaign promoting the concept, and then capture that market.

I've not played Eve in quite a long time (came back yesterday after a rather extensive hiatus following some real life stuff - think I need to give people some ISK!), but I do agree with the sentiment that we need in-game banks.

I'd be willing to talk with some respected players to bring this to fruition, and I'm willing to put a large sum of real-life money in escrow (or convert it directly in to a large quantity of PLEX and therefore ISK) to insure against losses (in return for equity of the overall business). Though, who could be trusted to deal with high -zX,XXX to low -zXXX,XXX of my money? I'd be looking for some real-life contracts in this regard, and a third-party escrow service between myself and the other party.

From a technical perspective, it's somewhat possible - though due to the lack of a transactional API, there's always going to be some level of manual intervention until it's dealt with.

The only sensible public transactions are collateralized. They work and there is already a functioning market for them. Everything else is whimsy or stupidity.

Most people wouldn't use a bank in the real world if they had an Eve wallet.

What's your view of third party collateralised loans? They seem to be a significant proportion of the market in this area but, technically, have all the fallibility of uncollateralised loans as the third party still needs to be trusted.

I do agree that if there is ever to be a serious stock market in EVE, it can only come about if CCP provides an ingame market much like the current market for commodities. But if we are strictly talking about banking here, then I see less need for CCP to create tools. We currently have all the basic tools we need for banks--an easy money transfer system, customizabile corp wallets, and retrievable APIs. The missing ingredient is that the players have not developed a banking system that players can trust.

I'm not sure someone who disappeared for 2.5 years with his investors' cash is the best person to be the poster-boy for eve's banking sector or to hold a significant stake in any bank.

Most people wouldn't use a bank in the real world if they had an Eve wallet. I suspect most money in banks earns no or virtually no interest and is only there for security and the convenience of transfers. Eve banks are actually worse than keeping the money in your own wallet on both those counts.

Maybe the Eve economy needs lending but the average player has no desire or need for a bank.

May I just submit an idea for stock pricing in eve? A somewhat intuitive framework would be to simply directly tie a base stock price to the value of a special wallet division in a corporation. Let's call it the "investment fund" of a corporation. Now before I go into this more you should note this system is still entirely trust based but it at least has the potential to produce situations that have balanced incentives

At the point of a corporation going public they issue some number of public shares which is entirely up to them. It could be millions but whatever it is the base price of the stock is dependent on this formula: (1/total number of stocks issued) x (value of investment fund). So if the investment fund were 10 billion and 1 million stocks were issued the base price would be 10000 isk. As more stocks are purchased more isk is transfered to the fund and the value of the investment fund goes up of course and the base price rises. Now as for what the base price actually means I'm thinking of it as the price at which anyone can buy without needing another party to offer to sell. You would also be able to place orders to buy and sell already owned stock at whatever price you wish. This facilitates larger trades between players that don't effect the base price directly

So in essence at the point where the publicly available stock becomes scarce or not at all available, the private speculative market would take over

Now as for the question of dividends I think that should be left completely up to the players who run the corp itself. Ideally you would have tools in place to securely give some percentage to stockholders if you wish. Say a 2% of the value of the investment fund dividend for all stock holders each month or simply no dividends if you're confident people will continue to value your stock

In the end the idea is that it would at least be possible, although most likely uncommon, to produce a situation where the people running a corp would have every incentive to increase the value of the investment fund steadily in order to continue to grow

While this is comparable to a ponzi scheme I think it is entirely possible for corps to use this model to create real value for investors.

Most people wouldn't use a bank in the real world if they had an Eve wallet

If we all had to put our money in player banks, and if those banks had to lend out most of that money to stay in business, the price of everything would go wacko. Just please put this silly idea out of your head. We don't want your bank.

On the more general economics level, the last thing the economy needs right now is the inflationary pressure that a fractional reserve banking system would create, particularly if CCP shifts drones towards bounties... more isk, less minerals.

Limiting the individuals ability to steal outright would allow banks to exist in a fashion that would protect the consumer without creating a "federal reserve" or FDIC insurance model that would literally explode the money supply and potentially create massive inflation.

This is the monetary theory at it's very core, and you do not really know what a huge influx of ISK might do to the game. for example - plex prices will be insane :)

True but actually humans are so well dressed like pets by money, it's bank dealers and the fact everything is worth of money (really?) they're unable to think by themselves and realise money is a mean and not an end.

The number of different direct and indirect bank taxes pick for an entire life that you just save by not having a bank account is huge enough you could most probably pay yourself a very nice sweet home that would last for generations.

There are few things I have no respect in this life, bank jerks are on my top list by a large margin after tyrants and ethnic racists, and believe me or not I do know how fragile a life can be.
Unfortunately we are stupid enough to let as heritage to our children monetary murderer system and an energetic way of life, so pathetic that if god really existed he would have to be ashamed of creating such shameless crap, and we are proud of it right?

Just don't feck me in game with that crap of bank, I already can barely read or listen guys making illnesses to themselves because another stupid like like him changed his sell order by 0.01 isk, fecking can't even figure out this is a game, they continue their shameless useless existence through pixels...yeah go ahead and be the richer of your graveyard, it's so important.

I'm out of this crap.

That is a lot of words for something that is never going to happen.

If people want to have fun discussing hypotheticals, then by all means go nuts. However, if you think this is actually going to happen, you are sadly wasting your time.

I'd be willing to talk with some respected players to bring this to fruition, and I'm willing to put a large sum of real-life money in escrow (or convert it directly in to a large quantity of PLEX and therefore ISK) to insure against losses (in return for equity of the overall business). Though, who could be trusted to deal with high -zX,XXX to low -zXXX,XXX of my money? I'd be looking for some real-life contracts in this regard, and a third-party escrow service between myself and the other party.

The fundamental problem remains, even above and beyond inflation, that with any system that is developed it will require some form of trust. It has been shown many times that characters that are trusted, or at least well known enough we think we can trust them, can still be corrupt. No single character should be trusted with a large sum of ISK, as so many things could happen and it all becomes lost.

The best solution, barring any additional improvements or intervention from CCP, would be to have a large group to hold on to the isk, so that no one player has control of a great amount of ISK at any single time. This network of characters holding the ISK, though, would make it more difficult to make investments that would help the interest rate. Even with this method, there are limited ways of making sure that one person does not have multiple alts in this group, giving him or her control of a large amount of ISK regardless.

It will be nearly impossible to create a loan system without collateral, as there is nothing that would require a character to pay back the ISK. A good solution would be to reduce the amount of collateral needed to loan based on the number, amount, or length of time for loans that a player has paid back on time. First loan would be for something like 85% of the collateral being offered, and with a proven payment record (and not one or two) the could eventually be increased in increments up to 125% to 150% of the offered collateral. This system is of course not completely secure, but is definitely a way to weed out some of the scammers.

If there are to be multiple banks working similar methods, a cooperation of sorts would be needed, if nothing other than a shared blacklist of characters that have run off with loans or bank funds, and IP addresses of those who took bank funds as well. Neither of these is entirely secure, but it does provide some matter of security.



In theory something like this could work, but it would be very close to RMT unless you are gaining ISK and ISK only from this venture. I would not see an issue with having the escrow as -z, with the stipulation that it be turned to PLEX's if it is ever needed, but I do not see it going over well if you received -z in return for the investment. You would be rather safe in your -z investment with a well written RL contract with the person or persons in charge of this venture as you suggested. The issue with that is once again you may have to receive ISK/PLEX in compensation, as it also brushes the RMT line. I say this because:

I make a contract with you.
I run off with 2 trillion ISK.
-zXX,XXX is converted to PLEX to pay back the investors.
I would then owe you -zXX,XXX in exchange for the ISK I run off with.

It could be possible with special exceptions from CCP, or just taking the ban that would follow if they did deem this as RMT.

And yet it's happened before....crazy.

If banking became feasible in EVE, the money supply would indeed increase through the money multiplier effect of fractional reserve banking. That is, 10 billion ISK is deposited in a bank, the bank keeps a mandated amount in reserve (let us say 20%), and then lends out 8 billion ISK. The borrower spends that money, which gets deposited back in a bank. That bank keeps 1.6 billion ISK and lends out 6.4 billion ISK. The process repeats until the amount becomes negligible. Assuming that all idle ISK is always deposited at banks, the ultimate effect is that banking has increased the money supply by 400% (if the reserve is 20%). This increase in the money supply would, of course, lead to the rise in the prices of goods (i.e. inflation).

The unanimous opinion of the above quoted posters seems to be that money multiplier inflation is a horrible, horrible evil that would destroy or corrode the EVE economy. I would like to offer a different perspective.

So the bank will have ALOT of isk to lend, acutally it will have more than the actual amount of ISK in the game to lend.

An intresting situation - you take a loan to buy a T2 BPO, as soon as the ISK changes hands, the guy you bought the BPO from puts the ISK directly into the bank - even though isk changed hands, the bank didn't see a difference. So in theory(and in real life) the bank can loan around 5 times more isk than it has in its reserves.

"During the height of EBANK, there was a phenomenon I noticed that freaked me out. A handful of people know about this, they can confirm it if they'd like to. The phenomenon was that for several months we were tracking deposits significantly exceeding withdraw requests...so much so in fact that they covered interest payments. In theory, so long as people had confidence in the Bank, deposits would always cover interest payments in perpetuity. The more we grew, the more true this became."

If a bank ran long enough, a certain percentage of it's funds in any given year are "freed" due to characters leaving and never returning but not being bio-massed. Normally this would simply add to the money supply, but in a EVE Bank this would drive down the fractional reserve requirement (Any Bank in EVE MUST have an ability to draw truly massive amounts of ISK in the event of a run. Runs are not an "if", they are a "when".)

Sense

What the banks in Eve will do is create more liquidity and increase the velocity of money, but there is no way in Eve for a bank to create money out of thin air as is done in the real world.

What the banks in Eve will do is create more liquidity and increase the velocity of money, but there is no way in Eve for a bank to create money out of thin air as is done in the real world.

Also, reading a lot of these comments, I think there are a few of the points Hexxx made that are being completely missed. First,



Deposits out paced withdraws - there is no multiplier here, there is a liquidity concentrator, for lack of a better term.

Although, as Claire Voyant pointed out to me in the second argument I ever had on MD, 'out of thin air' is an unfortunate phrase. The money doesn't just appear from nowhere but is, rather, projected into the present from future earning potential (i.e. the debt incurred by the customer is worth something as an asset because it is backed by his future earnings ... or something like that; my brain generally starts to bleed at this point when thinking about banking).

Again - on the mechanics of creating money. Just out simplicity.

i have 0 isk. i take a loan for 1M isk. i buy a BPO from you, i have 0 ISK, you have 1M isk.
You deposit that isk, Bank sees:
Deposits : 1M
Loans : 1M
repeat process 50 times by 50 different users : you'll get
Deposists : 1M
Loans : 50M.

You just created money out of "thin air". without printing it, i must add.
How much equity you demand the bank to have in order to safeguard the deposits, How much do think the deposit/loan ratio should be - all those are regulation questions, and have nothing to do with the functionality of the bank.
While it works, it will work fine. if it's completely safe, it will never collapse. (Assuming it's completely safe to deposit and all loans can be recovered to some extent).

i have 0 isk. i take a loan for 1M isk. i buy a BPO from you, i have 0 ISK, you have 1M isk.
You deposit that isk, Bank sees:
Deposits : 1M
Loans : 1M
repeat process 50 times by 50 different users : you'll get
Deposists : 1M
Loans : 50M.