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GreasyCarl Semah
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Posted - 2011.07.29 16:12:00 -
[1]
Would there be a market for fully collateralized debt? When I say collateral I am speaking of BPOs or ships with expensive (tech II) rigs that could be sold under contract. I know some of the station traders are always talking about needing collateral and may have assets they could put up for loans. Appraisal of those assets would be critical, of course.
Also, would there be a market for derivatives of highly volatile commodities? I am speaking of items like minerals or salvaged ship parts? Not necessarily futures contracts where you have to take delivery but options to purchase at set price levels.
Did the Eve bank try these things? I know that turned out to be a scam. Or possibly a scamola (lol).
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Thur Barbek
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Posted - 2011.07.29 16:40:00 -
[2]
If saying you want to lend out money with 100% collateral... there's lots of people who already do that. Also 100% collateralized bonds/loans are relatively easy to fill quickly in MD.
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Marius Bar'Tog
F-H Schwerindustrie und Sicherheit
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Posted - 2011.07.29 16:47:00 -
[3]
I think derivatives would be a nice thing, either for buying things at fixed prices or for speculation. But I'm not sure if this is possible with the current available contracts.
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GreasyCarl Semah
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Posted - 2011.07.29 17:15:00 -
[4]
I suppose I should have elaborated further. I am wondering if there is a market for a true banking arrangement where people deposit their money at a fixed rate and it is then loaned out in a fully collateralized manner. I am wondering if the Eve bank tried this and then turned into a scam? And if so, how successful that operation was?
As for derivatives. I am curious if anyone has tried selling contracts for delivery of items in the future at a set price. The current contract system doesn't allow this, it would have to be built on trust. We have discussed this before on this board, essentially what would happen is that a customer would buy the right to purchase and the seller would have to deliver the item at a set price. Let's say a manufacturer thinks tritanium is going to go to $3.50 by August 31st and today it is at $3.10. A person or trading house or bank could sell him a contract locking in that $3.10 rate of today and it could be settled by delivering the tritanium. If tritanium prices drop then obviously the contract is worthless since the holder could buy trit cheaper on the open market. If trit goes up then the contract becomes valuable. There are lots of details too but basically that is it.
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Zagam
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Posted - 2011.07.29 18:08:00 -
[5]
Game mechanics really don't fully support that. Also, how will you take a deposit (say, for 10B), get 10B of collateral, AND loan out that 10B?
---------.oOo.----------
Chaos, Madness, and Destruction. My work here is done. |
GreasyCarl Semah
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Posted - 2011.07.29 19:21:00 -
[6]
Edited by: GreasyCarl Semah on 29/07/2011 19:22:06
You are correct, the game mechanics don't support that, it would be based on trust just like the bonds that are so common in this forum.
A bank would take in the $10B as a deposit from one person and loan it out in exchange for collateral to another person, much like a real bank. The borrower would pay X amount of interest on the loan. The depositor would receive X-Y (Y being an interest rate spread) as a return on his deposit. The collateral would sit until the loan was repaid or the borrower defaulted.
I was thinking a rate of interest on a fully collateralized debt would be 5% and depositors might receive 2-3%. The obvious next question is why would a depositor do this instead of loaning the money directly? The most obvious reason is security from the collateral and number of loans, much like what is offered in a real banking operation. The other is that all the work to manage it is done by the bank.
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Florestan Bronstein
24th Imperial Crusade
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Posted - 2011.07.29 19:36:00 -
[7]
BMBE
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GreasyCarl Semah
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Posted - 2011.07.29 20:56:00 -
[8]
 Originally by: Florestan Bronstein
BMBE
Looks to be exactly what I was talking about. I think I'd like to do the same thing and maybe throw in the ability to do some contracts on widely used items in the marketplace.
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