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Deizel
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Posted - 2008.12.04 12:11:00 -
[1]
While you've come a long way and I'm sure you have many new projects in the pipeline I'd like to urge you to close all savings accounts (those currently paying 3% a month) and convert them to checking accounts.
The reasons are that:
1) EBANK did NOT have positive net earnigns in the last 30, and in fact run a loss of -2Bn ISK.
2) Both savings and checking accounts are exposed to the exact same credit risk, meaning that if you go bust both are affected in the exact same way (and yet one pays twice the interest)
By closing the savings accounts you will achieve the following:
1) Improved earnings for the bank
2) Improved credit rating (this is and should be your most valued asset, don't jeopardize it!)
3) More capacity for more deposits (at the lower rate)
An EBANK account (should) represent the most conservative investment in EVE. And while I'm sure that you can easily improve your earnings by giving out more loans, the best and simplest method to achieve both improved earnings AND improved credit is to close the savings accounts.
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Shar Tegral
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Posted - 2008.12.04 12:17:00 -
[2]
And would you suggest eBank go about breaking it's word?
To Shar -verb:
1 - To say what you mean.
2 - To say what it means.
3 - To say something mean. |
LaVista Vista
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Posted - 2008.12.04 12:18:00 -
[3]
 Quote:
1) EBANK did NOT have positive net earnigns in the last 30, and in fact run a loss of -2Bn ISK.
What exactly makes you think so? Because it sure isn't the case.
Quote:
2) Both savings and checking accounts are exposed to the exact same credit risk, meaning that if you go bust both are affected in the exact same way (and yet one pays twice the interest)
The money in our 3% accounts are much less volatile. So I don't quite agree.
Quote:
1) Improved earnings for the bank
Well, I can't argue with that.
Quote:
2) Improved credit rating (this is and should be your most valued asset, don't jeopardize it!)
EBANK is not and has never been, in jeopardy.
Quote:
3) More capacity for more deposits (at the lower rate)
We are already looking to do that. We are having an internal discussion about offering unlimited 1% accounts from what I understand. But stay tuned for that.
Quote:
An EBANK account (should) represent the most conservative investment in EVE. And while I'm sure that you can easily improve your earnings by giving out more loans, the best and simplest method to achieve both improved earnings AND improved credit is to close the savings accounts.
Well, I can see why you think so. Some of the arguments you put forward aren't completely true as we have other sources of income than you can see on our page.
But that doesn't mean you bring up a very good point. Shar Tegral has been very vocal about what he thinks about savings accounts. However, right now the general consensus is that we can't remove it before we have a better alternative. For now, we won't give out more accounts with 3%. Once our bonds are our, that might change, so that people can't deposit ISK into their old 3% accounts. But that's just an idea which has been bounced around, but is by no means final nor official. It's just my stance.
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LaVista Vista
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Posted - 2008.12.04 12:20:00 -
[4]
Originally by: Shar Tegral
And would you suggest eBank go about breaking it's word?
Yeah. Just taking away 3% accounts from people wouldn't go down well. Certainly not by the board, leave alone our customers.
We could have a run on the bank if we did so, which could hurt us very hardcore.
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Elder Langley
Langley Trading and Holdings
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Posted - 2008.12.04 12:20:00 -
[5]
Edited by: Elder Langley on 04/12/2008 12:24:08
Honestly, if Ebank were to do this they may have a run on their hands. I know I would not continue my account for a 1.5% monthly interest rate.
Not that losing my account would cripple them, but if enough of the account holders feel the same as I...
Edit:(Three posts while I was reading the op and thinking out my reply... I am too slow)
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Shar Tegral
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Posted - 2008.12.04 12:27:00 -
[6]
Since it was pointed out that I had been vocal about the savings accounts I'm going to list the things I dislike about them:
- If no new savings accounts are being offered, then all deposits into savings accounts should be stopped as well. It is not fair to latter generation account holders. It would also wean out those who use the Savings accounts like Checking accounts.
- I've always disliked the unlimited compounding interest. I think it should have been, at the least, capped at 3%.
That being said, the things that I have to say about continuing the savings accounts:
- Having a savings account is a reward for early adopters who helped to make eBank possible.
- eBank advertised "deposit it and forget it". Barring a critical survival need to stop the gain on these accounts, eBank should keep it's word in all things.
/thread
To Shar -verb:
1 - To say what you mean.
2 - To say what it means.
3 - To say something mean. |
Deizel
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Posted - 2008.12.04 12:35:00 -
[7]
Originally by: LaVista Vista
Quote:
1) EBANK did NOT have positive net earnigns in the last 30, and in fact run a loss of -2Bn ISK.
What exactly makes you think so? Because it sure isn't the case.
From your web page in the statistics section:
Total Interest paid in last 30 days: -24.9BN
Total Interest Earnied in last 30 days: +23BN ISK
Total Commission and Fees Earnied in last 30 days: +138.6M
Unless there are some figures omitted this adds up to -1.8Bn ISK
Also, I think this is profit before operative costs = dividends/salaries to directors etc.
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Ray McCormack
hirr
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Posted - 2008.12.04 12:42:00 -
[8]
That's just the interest earned from loans.
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Deizel
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Posted - 2008.12.04 12:47:00 -
[9]
Originally by: Ray McCormack
That's just the interest earned from loans.
What other interest is there? And why is it not listed?
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Bad Bobby
Ugly Toys
Zzz
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Posted - 2008.12.04 12:48:00 -
[10]
Originally by: Ray McCormack
That's just the interest earned from loans.
This.
It looks to me that they are doing rather well. They are earning almost enough interest from loans to cover the interest payments on the vast amount of deposits they hold. This means that almost all money they make by other means, using the deposited funds, is profit.
Good work EBANK 
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Mr Horizontal
Gallente
KIA Corp
KIA Alliance
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Posted - 2008.12.04 12:56:00 -
[11]
Deizel you can be assured I'd be the first to warn you if EBANK was running in a deficit, and I'd personally do everything to spark a run on the bank, in order to get the bank back into surplus.
We have had massively increased activity (nearly 3-fold) within EBANK over the last 2 months, and covered the period of the QR patch - which through experience has always resulted in increased activity. Reserves have been increased as a result.
So you know, Loans do not account for all of EBANK's income. The stats page doesn't show anywhere near the whole picture anyway.
We have pondered the idea of not having Savings accounts, and came to the conclusion that without a higher interest alternative (bonds), we would not do anything. The board also don't want to close Savings, and customers certainly don't want it. Limiting the access to Savings accounts equally helps no one and any change would go against the core promise that all accounts Checking or Savings are instant access.
Equally, our aggregate Rate of Liabilities is far less than our aggregate ROI.
I'm in the process of making a report anyway - since in case you haven't realised we've also smashed our 1.25T cap already. The board have been advised and recommended not to shut off creation of accounts as would normally be the case.
Bottom line, EBANK is fine, but has had MASSIVELY increased demand and activity recently.
Chairman | www.eve-bank.net |
Banni Vinda
Minmatar
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Posted - 2008.12.04 13:24:00 -
[12]
Originally by: Deizel
Originally by: LaVista Vista
Quote:
1) EBANK did NOT have positive net earnigns in the last 30, and in fact run a loss of -2Bn ISK.
What exactly makes you think so? Because it sure isn't the case.
From your web page in the statistics section:
Total Interest paid in last 30 days: -24.9BN
Total Interest Earnied in last 30 days: +23BN ISK
Total Commission and Fees Earnied in last 30 days: +138.6M
Unless there are some figures omitted this adds up to -1.8Bn ISK
Also, I think this is profit before operative costs = dividends/salaries to directors etc.
Can I suggest you take a look at our Annual Report. That might explain why we aren't experiencing the loss you believe we are.
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Ricdic
Caldari
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Posted - 2008.12.04 13:24:00 -
[13]
Some interesting points to take note of off our Stats page:
Total Account Balance: 1,404,583,173,373.44
Total Active Loan Account Balance: -459,305,623,966.92
I assure you we don't have 1 trillion isk on hand liquid. At most we have maybe 230 billion across all our staff.
Even more interesting:
Total Interest Paid last 30 days: 24,933,612,886.03
Total Interest Earned last 30 days: 23,075,378,424.84
Basically tells us that about 1/3 of our cash tied up in loans is paying for almost all customer interest requirements.
So EBANK is solid, nothing has changed.
As to your other point regarding checking/saving it was addressed by a few of the others. We aren't touching the current accounts adversely until the stock exchange comes in and we will rethink our positioning once we see the effects our bonds have. |
Deizel
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Posted - 2008.12.04 13:30:00 -
[14]
Thanks for your response Mr Horizontal.
Since there is no lender of last resort (central bank or treasury) in EVE I can't help but looking at these deposits the same way as I would look at a corporate bond. To that end it would be helpful to know what you have on your balance sheet (in addition to loans and deposits as listed on your web page), as well as to have a complete summay of your monthly cash flows (including those from other activities). Right now, judging form the informatin provided on your web page you are running at a loss.
You and another post have confirmed that your main source of income is from activities other than banking (commercial?) and this corroborates even further the idea that these deposits are in effect corporate bonds. Thus my point on why you are paying two very different rates on what is essentially the same bond exposed to the exact same risks and which as it turns out are not limited to loans only.
Note: I fully understand the difference to other bonds in the sense that it is unlimited (anyone can open an account at any time), and you offer buybacks (withdrawals) on a continuous basis; but my argument here pertains to risk and reward only.
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Ricdic
Caldari
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Posted - 2008.12.04 13:45:00 -
[15]
Your sentiment was also expressed in a similar way to Shar and a few of the others a while back. I do agree it's strange we have two accounts that have the same pros/cons with the exception of interest rate. It would make sense for the high interest rate to have limited withdrawal capacity or something of the sort to separate it from the other.
However it's a grandfathered plan. We don't like the idea of restructuring our customers after putting them onto these plans. If we could go back and do it all again we likely would have savings accounts have different rules/requirements.
We believe our bonds will be sexy enough to push most of our savings customers off these accounts and our checking customers will also see the same benefits so there is no seeming favoritism. Savings accounts were available to anyone when EBANK opened, there wasn't an elite invite list or anything of the sort.
Soon enough the whole structure will change anyway. The exchange and bonds should really make some pretty big ripples in the way things work. |
Shar Tegral
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Posted - 2008.12.04 13:49:00 -
[16]
I think it safe to say this: eBank is a private organization that is not obligated, or inclined, to divulge the entirety of its innermost workings simply because someone wants to know.
If you really want to find out, go to the eBank forums and ask questions there. Perhaps even apply to work at eBank. Starting a drama thread here, even if it is a good PR opportunity, is not the way to accomplish what your stated goals are. (Or if your goals were to create a run on the bank - LOLOLOLOL.)
PS: In other words, you opened your mouth like a fool and still you want to push an agenda? There's a word to describe people like you and since I'm not at eBank anymore I can say it. Idiot.
To Shar -verb:
1 - To say what you mean.
2 - To say what it means.
3 - To say something mean. |
Damien Jax
Chaos Faction
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Posted - 2008.12.04 14:24:00 -
[17]
I have to agree with Shar here, EBANK is not a publicly owned company, therefore they don't need to release any statements (nor would I want to see them, I'd be so damned jealous of all the assets). The only purpose a release like that would serve would be to increase confidence in the bank. However, since you were the only one in recent memory expressing doubt about them, what purpose would that serve?
As Ricdics mentioned, 1/3 of their total assets is almost supporting a full 1.4 trillion of deposits and interest payments. Even without all of their other income sources (read up on it, they do production, investments, and anything else that might make money) they'd still be in pretty good shape.
I have to agree with their motivation to keep the savings accounts, it'd just **** more people off to get rid of them than it's worth.
The one question I do have is this - what is the purpose of the bonds? I have to ask, why would EBANK need the money generated by a bond offering? Sorry if I'm missing something here, but why pay more interest on money the bank probably doesn't need. Are you planning to fund some expansion? |
SencneS
Amarr
Rebellion Against big Irreversible Dinks
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Posted - 2008.12.04 14:36:00 -
[18]
Originally by: Deizel
Thus my point on why you are paying two very different rates on what is essentially the same bond exposed to the exact same risks and which as it turns out are not limited to loans only.
This is a question I've had an answer to for a long time. No one, until now, ever proposed that there is a double standard for the same risk. The answer is simple - The risk is placed on EBANK'S hands not the customers.
Is EBANK really an IPO? A question I've been mulling over for a long time now but important to the question you ask. In the EVE Players eyes EBANK is no different then any other public company at it's basic level. I deposit money, I get more money back, assuming all went well. Although thats an extremely wide definition the same can be said for the in-game market. I deposit Assets on the market, I get more assets back, assuming all went well.
When comparing EBANK to an IPO there are differences.. For one, one customer depositing or withdrawing ISK does not effect the withdrawal or deposits or another, it also doesn't effect the other person's interest rate. That statement is important and what defines EBANK as NOT an IPO.
In a normal IPO a plan is drawn up, and ISK that is being asked for by the public has been worked out to the approximate value of what is required to run the IPO. A 10B IPO if one person buys 5B in shares and another only 100M in shares. What happens to the IPO if they allowed the same "withdrawal as you please" option as EBANK.
Well with the 5B (50%) would cripple the IPO overnight. That 100M investor wouldn't be able to achieve his return. If the 100M withdraw chances are that will not cripple the IPO.
In EBANK that doesn't exactly happen. Remove the sheer size of the deposits for a second, lets assume the customer ran the bank and withdraw 50% of EBANK's holdings. What would happen? Would the other 50% be effected? In short, no. The board and all of EBANK would simply shrink and liquidate assets etc to a level that would not only fulfill the 50% withdrawals but still cover the interest of the other 50%.
Back to the main point - Where is the risk.
From a customers view point the risk is the same as any other IPO out there. However EBANK has a point to prove, a challenge is you will. CCP's Dr.E at fan-fest 2007 announced that BANKS in EVE are more then likely a scam. EBANK plans to prove him wrong, and we're enjoying proving him and everyone else wrong every step of the way.
So from EBANKs view point - The risk is always on EBANK, not the customer. If EBANK runs at a loss the customer will never be effected. So you'll have to forgive the rest of EBANKs staff if some don't understand what it is you're proposing or the aspect you're taking.
We're offering our customers a dynamic chance to invest in a single entity at dynamic interest rates. From the customers viewpoint all they should need to see is, "If I deposit X amount into Y account, I'll get Z amount of interest in return. My risk is, they could scam and take my ISK."
The logistics behind EBANK are so large and complex that if we where to take a single customers ISK and break down the interest so that each one of EBANKs activities pays a proportional amount of interest you'd break your brain trying to wrap your mind around what goes where, how much return goes where. I'm not calling you dumb or you'll never understand, just EBANK doesn't work that way, it would be stupidly complex if it did.
EBANK takes all the deposits and works them a single deposit and pays what people expect from the return of the whole working capital. Attempting to break it down into "What a single customer invests into" is irrational and completely redundant. And not exactly fair. If we a depositor deposited 50B across multiple accounts (And some do) allowing us to open a profitable new venture everyone benefits, not just that one person.
EBANK is about community and we aim for just that,community helping the community. |
Deizel
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Posted - 2008.12.04 15:24:00 -
[19]
Edited by: Deizel on 04/12/2008 15:26:26
Thanks for the response Ricdic. I'm not saying that EBANK's foundations are not solid. But I would have expected the revenues from your core business, i.e. banking (deposits + lending), to be positive, in particular since it's also the only revenue stream that is transparent. Also, thanks for clarifying that the 'other' account really only exists out of legacy reasons.
SencneS, I think you know exactly where I'm coming from. Thanks for sharing your thoughts.
In fact, the lack of a central bank is of serious concern (I have raised this in the Features and Ideas Discussion some while ago as others before me), and hopefully LaVista Vista will push for that. CCP already has an in-house economist which could act as a central banker to regulate banks, set reserve requirements as well as a base interest rate (paid to banks on their reserves).
Has Dr E said anything about this?
Shar, I didn't mean to suggest that you're an idiot, and I'm sorry if I made you feel that way.
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Brock Nelson
Caldari
Flux Technologies Inc
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Posted - 2008.12.04 15:31:00 -
[20]
Edited by: Brock Nelson on 04/12/2008 15:32:32
Why is the lack of a central bank a serious concern? Once in awhile people bring up the lack of central bank as "serious concern/issue".
If you want to earn easy money (interest) then stick it in the market, invest in ipo/bonds or deposit in EBank or DBank.
10% for Returning Customers |
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Hexxx
Minmatar
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Posted - 2008.12.04 15:40:00 -
[21]
I wanted to build on what Sceneces said here and address two points:
1) Is EBANK a Bank or an IPO?
2) Why does EBANK want to release Bonds?
EBANK: Bank or IPO?
IPO's come in two flavors; Shares (also known as stocks) and Bonds
Shares (equity financing)
1) Partial ownership of the company (sometimes includes voting power)
2) Receives a fraction of the companies profits, and is based primarily on the performance of that company's business
(Subject to the profit sharing plan and dividend schedule laid out in the Initial Public Offering (IPO))
3) Can go on forever as long as the company continues to do business
4) Monthly or weekly reports expected
4) Entitled to a portion of the value of the company in case of liquidation.
Bonds (debt financing)
1) No ownership of the company
2) Receives a fixed interest payment in the form of dividends
3) Has an end date, known as a maturity date, at which point the issuer repays the nominal amount
More on securities in EVE can be found in this post I wrote.
EBANK is a commericial/investment bank that engages in retail and business banking activities. Or to be more specific;
"EBANK raises funds by collecting deposits from businesses and consumers via checking accounts and savings accounts. It makes loans to businesses and consumers. It also buys corporate bonds and shares. Its primary liabilities are deposits and primary assets are loans and other investments."
I would hope that after reading the above, it's clear why EBANK is a Bank, and not an IPO. I would also add that since customers have no ownership of EBANK, EBANK is not required to publish it's financial reports. They are published as a courtesy and to help instill trust in EBANK.
Why does EBANK want to release Bonds?
Bonds provide EBANK with a few benefits;
1) An ability to raise cash quickly for unanticipated (and large) commercial loans.
2) An ability to manage aggregate liabilities at a level never before possible.
3) An ability to potentially "buy back" it's own debt
4) An ability to manage and perdict it's own liquidity (this allows the Bank to leverage more of the money it already has, which means doing more with the money it already has)
5) An ability to grow and shrink it's liabilities without breaching the contract between Bank and Customer
Some side benefits include making EBANK's exchange more active and introducing more people to the idea of using the exchange on a regular basis. It's worth noting that Bonds will "feel" very similiar to a CD (certificate of deposit). This is not an accident.
Closing Thoughts
I've said before that I want EBANK to act as a Central Bank for EVE. The biggest mistake people make is thinking that EBANK as a Central Bank will look similiar to RL Central Banks. It won't. There are some things that can't be done, some things that shouldn't be done, and then there are a few things we can pull off. Inter-Bank Lending and short term loan rates are something that a Central Bank can define to facilitate credit and lending between businesses. Generally this leads to better leverage of existing assets as it allows them a safety net on operational cash.
p.s. This is why people call me a "Market Elite" 
EBANK Staff | www.eve-bank.net
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Shar Tegral
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Posted - 2008.12.04 15:43:00 -
[22]
Originally by: Deizel
Shar, I didn't mean to suggest that you're an idiot, and I'm sorry if I made you feel that way.
Proof that the ability type does not necessarily include the ability to read. Of course this whole thread is proof that you fail at reading so... You are forgiven if you think your epic fail has somehow made me feel bad.
To Shar -verb:
1 - To say what you mean.
2 - To say what it means.
3 - To say something mean. |
Deizel
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Posted - 2008.12.04 15:47:00 -
[23]
Originally by: Brock Nelson
Why is the lack of a central bank a serious concern? Once in awhile people bring up the lack of central bank as "serious concern/issue".
To protect the hard-working savers in EVE from an (undisclosed) investment gone wrong by one of the banks maybe. 
To influence the EVE economy on a larger and different scale than done thus far would be another reason ...
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Hexxx
Minmatar
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Posted - 2008.12.04 16:00:00 -
[24]
Originally by: Deizel
Originally by: Brock Nelson
Why is the lack of a central bank a serious concern? Once in awhile people bring up the lack of central bank as "serious concern/issue".
To protect the hard-working savers in EVE from an (undisclosed) investment gone wrong by one of the banks maybe.
To influence the EVE economy on a larger and different scale than done thus far would be another reason ...
A Central Bank formed by a Government (financed by taxes) would serve this purpose. Perhaps all the alliances can pay taxes to just one of the Banks and that Bank "insures" the other Banks to a point?
CCP doesn't want to create another isk faucet. It's up to players to manage the risk of investing and Banking.
p.s. I wasn't really serious on the first part; but it's the only way a Central Bank could ever seriously insure member Banks.
EBANK Staff | www.eve-bank.net
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Deizel
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Posted - 2008.12.04 16:01:00 -
[25]
Originally by: Shar Tegral
Originally by: Deizel
Shar, I didn't mean to suggest that you're an idiot, and I'm sorry if I made you feel that way.
Proof that the ability type does not necessarily include the ability to read. Of course this whole thread is proof that you fail at reading so... You are forgiven if you think your epic fail has somehow made me feel bad.
Shar, I don't know what I said that has offended you so deeply, but at the risk of redundancy please let me apologize again.
Also, why do you think I want to offend you in the first place: I don't know you, and I don't even know the purpose of your posting in this thread as all you have done is vent some frustration the origin of which is unknown to me.
If it's to do with the fact that I missed your previous discussion on this very same topic, then I apologize for missing that also. Please provide a link. Thanks!
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cosmoray
Cosmoray Construction
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Posted - 2008.12.04 16:09:00 -
[26]
As a side note, has EBank talked to some of the major alliances about managing their finances?
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Hexxx
Minmatar
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Posted - 2008.12.04 16:18:00 -
[27]
Originally by: cosmoray
As a side note, has EBank talked to some of the major alliances about managing their finances?
EBANK has contact with some alliances, as we've stated earlier EBANK has provided loans to alliances in the past.
Alliances, in my view, are more likely to need their money immiediately available and in large amounts. While loans seem to work well, alliance level accounts wouldn't.
That said, Alliance members (the individuals) seem to like us just fine. =)
EBANK Staff | www.eve-bank.net
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trade alt2
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Posted - 2008.12.04 16:33:00 -
[28]
Originally by: Deizel
Shar, I didn't mean to suggest that you're an idiot, and I'm sorry if I made you feel that way.
I think it was the other way around if i am reading it correct 
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flakeys
Tier 3 Technologies Inc
Lazy is our middle name
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Posted - 2008.12.04 16:35:00 -
[29]
Originally by: trade alt2
Originally by: Deizel
Shar, I didn't mean to suggest that you're an idiot, and I'm sorry if I made you feel that way.
I think it was the other way around if i am reading it correct
Setting reset , in other words trade alt2 is my char in case i read it wrong and someone wants to flame me for it. 
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Ricdic
Caldari
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Posted - 2008.12.04 16:36:00 -
[30]
Originally by: Deizel
Shar, I don't know what I said that has offended you so deeply, but at the risk of redundancy please let me apologize again.
I wouldn't let it worry you. Shar has a way of getting offended at most comments. Frankly if you didn't offend him I would be more concerned |
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