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Banking Is Missing from Eve

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Coco Noceuse Center for Advanced Studies Gallente Federation 2	Posted - 2016.05.18 13:33:05 - [1] - Quote I think NPC banks should be developed to loan to players and securitize those loans against player assets. So while there are outstanding loans, payments must be timely made or the player loses the collateral. The collateral cannot be sold or contracted. During that time a character cannot be doomheimed or skill extracted until such time as the loan is paid back. I think providing lending would encourage more risk and player development. Especially now with citadels and other high ticket items. Just a thought.
Celthric Kanerian Ascendance Of New Eden Workers Trade Federation 767	Posted - 2016.05.18 13:52:51 - [2] - Quote This doesn't help the overall sandbox gameplay though. If you want to loan isk, do it from people in your corp.
Syrias Bizniz Zebra Corp Goonswarm Federation 466	Posted - 2016.05.18 14:41:31 - [3] - Quote Coco Noceuse wrote: I think NPC banks should be developed to loan to players and securitize those loans against player assets. So while there are outstanding loans, payments must be timely made or the player loses the collateral. The collateral cannot be sold or contracted. During that time a character cannot be doomheimed or skill extracted until such time as the loan is paid back. I think providing lending would encourage more risk and player development. Especially now with citadels and other high ticket items. Just a thought. Spike prices of items without demand up, use as collateral, ignore payment, have an effortless ISK faucet running. Also, there's player driven loans already.
Daichi Yamato Xero Security and Technologies 3263	Posted - 2016.05.18 15:11:17 - [4] - Quote Do it with players. Better in every way. EVE FAQ "7.2 CAN I AVOID PVP COMPLETELY? No; there are no systems or locations in New Eden where PvP may be completely avoided" Daichi Yamato's version of structure based decs
ShahFluffers Ice Fire Warriors Escalating Entropy 9919	Posted - 2016.05.18 17:48:26 - [5] - Quote Issues I see: The idea based on an already unreliable metric. The NPC valueuation of an item is not very good and is easily manipulated. Why put somehing up for collateral when you can simply sell it and not have to deal with repayment, interest rates, or potential debt if your venture fails? It is not like any item you possess is truly unique and can't be bought somewhere else at any future time of your choosing. Overall... i don't see it as a viable mechanic unless the DEVs want to dedicate actual human resources to constantly track players, their accounts(s), and potential shenanigans to prevent abuse of this mechanic. How did you Veterans start? "Learn how things work. The intricacies, interactions, and hard limits... knowing these things will grant you far more power in the long run."
Igzorn Buelle 2	Posted - 2016.05.18 18:06:59 - [6] - Quote Coco Noceuse wrote: I think NPC banks should be developed to loan to players and securitize those loans against player assets. So while there are outstanding loans, payments must be timely made or the player loses the collateral. The collateral cannot be sold or contracted. During that time a character cannot be doomheimed or skill extracted until such time as the loan is paid back. I think providing lending would encourage more risk and player development. Especially now with citadels and other high ticket items. Just a thought. if you look waht dmg Banking in rl does it dont think it would be a good thing to bring it to eve . there is allready enough destruction here.
Zhilia Mann Tide Way Out Productions 2588	Posted - 2016.05.19 05:48:57 - [7] - Quote Igzorn Buelle wrote: if you look waht dmg Banking in rl does it dont think it would be a good thing to bring it to eve . there is allready enough destruction here. Eve history lesson. Searching for Ricdic should get you all the details you'd want. Edit: why is everyone on the forums out to make me feel old these days?
Fat Buddah Federal Navy Academy Gallente Federation 27	Posted - 2016.05.19 15:07:17 - [8] - Quote I have some medical bills to settle...
darkneko Black Cat mining Inc. 8	Posted - 2016.05.20 05:31:45 - [9] - Quote Npc banks would be a much more complicated system then you are imagining considering the ever changing market structure. One day your calaterial would be woth the lone and the next it could be worth half if you use something like ore which changes daily. Then you could make a profit by letting them keep it and so on.
Brokk Witgenstein Extreme Agony The Wraithguard. 308	Posted - 2016.05.20 09:01:07 - [10] - Quote Guys guys guys! Don't torpedo this idea too soon- something good may come out of this: when no collateral can be offered, a permanet killright is exchanged with which the banker can do as he pleases when payments stop. Mmmmmkay nope. Dumb idea. TORPEDO AWAY LADS!

elitatwo Eve Minions O.U.Z.O. Alliance 1216	Posted - 2016.05.20 12:04:38 - [11] - Quote Someone please explain to me why we are goodererererer people when we collect printed paper and pressed metal discs?# I just watched the o7 show and there is this market blabla, which I don't get. The market in EVE is the following: Dude finds a module in space and want insta-rich. Makes sell mod he got paid for collecting already for 3 bajillion and scam zee peoplez. Makes laugh. Markets with humans work different. Guy plant strawberries. Guy collect strawberries and drives to market and sells yummy strawberries. Now the latter has zero impact on me, while the former effects everyone. For what gain or not, I cannot tell. Someone please elaborate. Eve Minions is recruiting. Learn from about pvp, learn about ships and how to fly them correctly. Small gang and solo action in high, low and nullsec and w-space alike. We will teach you everything you need and want to know.
Donnachadh United Allegiance of Undesirables 845	Posted - 2016.05.20 13:10:38 - [12] - Quote Coco Noceuse wrote: I think NPC banks should be developed to loan to players and securitize those loans against player assets. So while there are outstanding loans, payments must be timely made or the player loses the collateral. The collateral cannot be sold or contracted. During that time a character cannot be doomheimed or skill extracted until such time as the loan is paid back. I think providing lending would encourage more risk and player development. Especially now with citadels and other high ticket items. Just a thought. And it is a really bad thought so -1. But to play along with the spirit of discussion. What prevents a player from borrowing ISK buying stuff, transfer it to another character and then biomass the one that has the loans? In this auto loan scheme how do you account for players (military etc) that may be called away from the game for months at a time and miss payments as a result of it?
Coco Noceuse Center for Advanced Studies Gallente Federation 2	Posted - 2016.05.20 18:50:13 - [13] - Quote Thanks. Great thoughts.
Teckos Pech The Executives Executive Outcomes 4868	Posted - 2016.05.20 20:31:15 - [14] - Quote Banking in Eve cannot exist, not on a wide scale. For that you need a regulator--i.e. a government. Every bank in the game run by players has turned out to be a scam. Every. One. Lending is basically a contract, and for contracts to be a thing there needs to be an authority that can enforce the terms of the contract. Typically that is the role of the government via courts. If you and I enter into a contract and you do not hold up your end of the bargain we go to court and I get relief. There is no such mechanism in game. About as close as we can get to that are those people who have built up reputations for scrupulously honest such as Chribba. And these are people who appear to care more about their reputation in game than anything else. Aside from that the only other entity would be CCP. CCP has the power to enforce contracts of the nature being discussed. As for securitization all that does is take an illiquid asset typically debt and turn it into a liquid asset. This is usually done by taking a number of debt obligations and bundling them together creating a collateralized debt obligation (CDO). If you buy a CDO you earn money interest and principle payments on the orignial underlying debts. So for example, if we were talking about 1,000 mortgages and each one is paying 1,500 a month in interest + principle or 1.5 million/month that is what you'd get. For all of this to work we need a solid and prudential regulatory structure or it will fall apart right quick. And even with a solid and prudential regulatory structure, if that regulatory structure becomes less prudential then you can have systematic risk creeping into the these secondary debt markets....and you may not realize it till it blows up in your face. And given the proclivity of players to come up with new angles on scams anyone trying to regulate such a market will find it is a full time job. And while this can increase risk...it is not fun risk. Tearing through a region poking at an alliance and trying to goad them into reacting and have a gud fites is fun risk. Waking up one morning and finding out that your wealth was wiped out because CCPs new head regulator got lazy and systemic risk crept into the system is not fun risk, IMO. So...no. -1 And for those wondering, yes, imprudent regulation starting in the late 1990s and continuing through the 2000s is one of the primary reasons that we had the 2008 Financial Crisis. "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."--Friedrich August von Hayek
Isaac Armer Tactical Stability Union Apocalypse Now. 234	Posted - 2016.05.20 21:22:11 - [15] - Quote Teckos Pech wrote: snip I agree 100% that NPC banking in EVE wouldn't work for many of the reasons you mentioned. I'd also argue that greed of individual people that incentivized banks to vastly overlever to maintain margins led to the crash, not any lack of regulatory oversight. That's obviously a conversation for another thread though, but I couldn't help myself given I work in finance and love talking about that stuff.
Teckos Pech The Executives Executive Outcomes 4869	Posted - 2016.05.20 22:02:37 - [16] - Quote Isaac Armer wrote: Teckos Pech wrote: snip I agree 100% that NPC banking in EVE wouldn't work for many of the reasons you mentioned. I'd also argue that greed of individual people that incentivized banks to vastly overlever to maintain margins led to the crash, not any lack of regulatory oversight. That's obviously a conversation for another thread though, but I couldn't help myself given I work in finance and love talking about that stuff. Not a lack, but a change in the lending standards. Equity in a home stabilizes the market. Thus, the old requirement of a 20% down payment lowered the likelihood of default. For example, if you have a $100,000 house and you owe $80,000 it the price has to drop quite a bit before you would consider walking away. If you have a $100,000 and owed $95,000 and the price drops to $90,000 then you might just walk away, why keep paying on a loan for a house you owe more than you can sell it for. And considering that most mortgages are non-recourse loans, just up and walking away (pretty much literally) the move away from the standard conforming loans with 20% down was a move towards more risk in the housing market. This risk was somewhat masked by the upward trends in housing prices. If I buy a house with 0 down and prices are moving up rather quickly, I can build equity that way too. So the move towards 10%, 5%, 0% no-doc loans and the like can only really become a big thing...if you get buy in from Fannie and Freddie. Once Fannie and Freddie move into that market, then you are going to see an increase in the amount of risk in the MBS market. And then given how Fannie and Freddie work, where they "take back" and mortgages that fail to perform (i.e. the borrower defaults or falls behind on payments) that makes the MBS market ripe for systemic risk. Things looked great so long as housing prices were going up. Rising housing prices, relying on credit scores and lowered lending standards looks great in that situation. When prices stop going up, as they did in mid 2006, well...the party's over at that point. Oh, and lets not forget the refinancing for 125% of your homes value...talk about starting out on day one being underwater! To be clear this is just part of the story. Wall Street was very happy to go along with all of this because they were making huge amounts of money. So I'm sure their greed blinded many in the financial sector to the levels of risk they were taking on. Having interest rates held so long for so long was almost surely another factor. The FDIC even plays a role, IMO. Prior to the FDIC the old phrase regarding banks and deposits was, "Depositors are worried, thus bankers are scared." Because depositors are worried that the bank they have deposits with might take on too much risk and thus threaten their deposits, bankers had to pay closer attention to the risks they were taking lest depositors start withdrawing funds en mass leading to a run on the bank. With FDIC insurance, depositors stopped caring because they knew their deposits were safe no matter what the bank did. Interesting both Carter Glass and FDR opposed deposit insurance. It was Henry Steagall that rammed it through and it was supposed to be temporary and only for small deposits. And I'm not making any sort of partisan argument here. Both Republicans AND Democrats liked using the financial system to promote home owner ship in a way that was largely "off the books"--i.e. it required no government expenditures. And some of this stuff can go way...waaay back. For example, Fannie was created during the Great Depression. Mortgage securitization also was created at the same time. The point is we set up a system that worked pretty good for awhile (baring the S&L crisis...which can also be traced to some dubious government regulations as well, IMO--e.g. see unit banking). Then when the right set of circumstances came about there was tremendous pressure to lighten the regulations to promote an agenda both parties found appealing and it ended up creating systemic risk. So, no I don't want to see something like this in game. Even if we go "free market" and let banks deal with risk based on their decisions and not having regulation we'd still need some sort of in game court system so many of the financial contracts we see IRL could actually exist in game. I don't think that is a good idea as I'm sure people will try to find ways to game it, and there will undoubtedly be cries of favoritism. "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."--Friedrich August von Hayek
Isaac Armer Tactical Stability Union Apocalypse Now. 242	Posted - 2016.05.22 02:56:46 - [17] - Quote Teckos Pech wrote: snip That ignores the pressures placed on banks by an increase in the number of exchanges though. It all keeps going back to the average person wanting a house worth more than they could afford. The size of the average house for a middle class family has risen from 900 sqft in 1950 to 2400 sqft today. We the average people want more and more from banks to fund our more extravagant lifestyles and they responded by overlevering, opening newer exchanges and point blank taking more risk day in and day out. What did we expect? I agree that wall street was making a huge amount of money, but what is wall street really? The middle class's retirement accounts, college savings accounts, etc. We, the middle class got spoiled by double digit gains ever since the volcker Fed did it's thing, and in an effort to keep up those gains, leverage was used to keep giving us what we wanted by banking institutions. "The customer is always right" is what killed us in '08-'09. We just don't want to admit that because doing so would place blame on us and not on 'big evil nameless wall street'. I agree that both Republicans and Democrats are to blame, I haven't been registered to either party for a decade now. That being said, no regulation would have stopped financial institutions from giving their customers what they wanted, which is double digit returns on 401ks, IRAs, 403bs, 529s, as well as affordable mortgage rates. We got exactly what we wanted and paid the price for being greedy. It's simply easier to blame banks and a lack of regulation than to admit we the average person were so greedy for the last few decades. Hell, in real life legal cases involving banking and investments don't even go through the normal legal system as it is, they use special arbitration outside of the typical process simply because markets are too complex for an average person to understand. Back to the thread, a banking system in EVE does assume there would be a regulatory body. No regulatory body has worked yet in the real world, why do we think it would work in EVE, and why do we think it would be worth the resources by CCP?
Roenok Baalnorn Sadistically Sinister 24	Posted - 2016.05.22 06:33:01 - [18] - Quote Banking in no shape or form would really add anything positive to this game. Need money jump in a ship( even the free one) head out to a belt and kill rats. Having money issues? Work on your money management skills( it will help you in real life as well). Its to easy to make isk in this game as it is.
Sean Parisi Blackrise Vanguard 731	Posted - 2016.05.22 23:01:47 - [19] - Quote Just bring back collateral contracts :3
Teckos Pech The Executives Executive Outcomes 4870	Posted - 2016.05.23 18:19:10 - [20] - Quote There have been stable banking systems. Canada has an extremely stable banking system. Never had a financial/banking crisis. Even during the Great Depression Canada did not have the wave of bank failures seen in the U.S. for example. The Scottish also had a stable banking system until their banking system was brought under the Bank of England. The Bank of England...that was an unstable banking system until after 1866. Prior to that the Bank of England was directed to offer put options in the bills market for any under performing bill. Problem is this created an incentive for banks to take on more risk and after a number of banking panics the Bank of England, and the financial press made the case to stop this practice. Finally, the Bank of England issued a statement saying they were no longer going to offer the put option. Then in 1866 Overend-Gurney, a bank in London, got into trouble and the Bank of England let them fail instead of bailing them out (as they had in the past). After that the bankers realized they had to be more prudent as there would be no more bailouts. And it worked up to 1914 with the start of WW I. The U.S. has an incredibly unstable banking system. During the Great Depression thousands of banks failed, almost all unit banks. Then there was the Savings & Loan crisis, the failure of Continental Illinois that prompted a bailout to preserve the banking system, the bailout of Long Term Capital Management to protect the shadow banking system, and of course the 2007-2008 Financial Crisis. But the thing is that in game there is not much downside to engaging in financial mischief. Not for the player. You cannot be sued. You cannot have your assets and ISK confiscated nor can they be imprisoned. In fact, CCP will not only do nothing to such players they will often be f+¬ted. No, banking simply cannot work in this game at all given the current way the game works. This is why every single instance of a bank in game has turned out to be some sort of financial scam. Anyone thinking otherwise is either deluding themselves or are going to running such a scam. "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."--Friedrich August von Hayek

Sella Lesbon Livonian Bearslayers The Methodical Alliance 5	Posted - 2016.05.26 12:36:36 - [21] - Quote Celthric Kanerian wrote: This doesn't help the overall sandbox game play though. If you want to loan isk, do it from people in your corp. Problem here is that people have no tools to penalize other player for fraud or other 'criminal' activity. Bounties? Not working.. For example in real life - you would file a fraud case to the police. But yeah - police in eve high sec is just none existing. Only rule is don't shoot :P in highsec or we wreck you - but that doesn't work on all cases. > Never do something to someone that you wouldn't like to be done to yourself.
Tabyll Altol Breaking.Bad Circle-Of-Two 163	Posted - 2016.05.29 20:53:51 - [22] - Quote Coco Noceuse wrote: I think NPC banks should be developed to loan to players and securitize those loans against player assets. So while there are outstanding loans, payments must be timely made or the player loses the collateral. The collateral cannot be sold or contracted. During that time a character cannot be doomheimed or skill extracted until such time as the loan is paid back. I think providing lending would encourage more risk and player development. Especially now with citadels and other high ticket items. Just a thought. Ingame called plex just buy one and sell it on the market --> ISK -1


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