Clarification about Entropia banking operations

[NotVF]

Originally Posted by PiNerd

Just look at the size of this thread and you can see how wrong MA is! (and how rich the creator of the thread is in EFD!) If they made the banking licences cheaper, they could make much fmore profit from them because more people would buy them, and they would be able to employ more staff to monitor it and the Entropia Universe would remain a unique and diverse environmet for people sick of the real world!

1. Berta Bot is an RSS bot, not a real person. Hence the 'bot' part of the name.
2. There were only 5 bank licenses.

[PiNerd]

Yes I know there were only 5, but what im saying is that if they were made affordable (possibly on subscription) and there were not a limited number, MindArk would make more money, and Colonists would have more fredom win-win! And less money win-win-loose.

[NotVF]

Originally Posted by PiNerd

Yes I know there were only 5, but what im saying is that if they were made affordable (possibly on subscription) and there were not a limited number, MindArk would make more money, and Colonists would have more fredom win-win! And less money win-win-loose.

Exactly what is the added value of FIVE banks/pawn shops to you? Let alone 1000 banks/pawn shops?

The high markup these people paid is because it's something exclusive, and even if there are only 5, they will be forced to compete, as I have serious trouble coming up with even 1 single reason why anyone would use their services.

Add to that that the 5 investors want to see their money back within at the very most the two years their licenses will be valid (and MA would prefer seeing the same thing, otherwise it won't make for a nice press release), and you'll see why your idea won't hold ground.

If there's a competition among people who are desperate to recoup their investment without trying to minimise their personal winnings, the victim will always be the average player. 3 banks would have been good, let's be glad MA settled for 5, instead of 100.

[Cindywood]

*bump*



This shall never be forgotten.

[Nihilist]

.

[Parlog]

Has anyone of you ever read how a bank in RL really works? I mean the basic business of a bank? This has nothing to do with a pawnshop anymore like it was like 500 years ago.

I understood it like this: ( I read it in a novel about money, could be crap but i doubt it)

Mr. A opens up a bank and all he has to make sure about is a perfect bookkeeping and a safe place for money (how you do that and on what technological standard doesnt really matter here) The state, the bank is in, has to make sure, that these points are given and therefore they only give a licence to a safe bank and they only give it along with the duty, that, whatever money flows THE BANKER MUST BUILD A RESERVE OF A CERTAIN PERCENTAGE of the cashflow, means he cannot work with all the money, all the time. If this would be the case the Banker Mr. A could theoretically give out infinite ammounts of loans with a single $ and therefore make an infinite ammount in depts as turnover.

Mr. B opens an bankbock in the bank of Mr. A, because he thinks, his 10K $ would be a lot safer there, than in his own house, when he banks the money for a set period of time he gets 3%/pa interest, which is good enough to hedge the money against inflation. So he puts the 10K $ on his bankbook at the bank of Mr. A.

What does it meanto bank money for a set period of time? Simply one thing: Mr. As Bank now can work with this money in this time period.

Now we come to a bankers daily business: All constructed to point it out.

Mr. C crashed his car, but he is sales agent and badly needs a new car at once. He doesnt have the cashflow handy to buy a new one out of his pocket, so he goes to the bank of Mr.A to loan 15K $. Mr. A would really like to give a loan of 15K $ but he has only 10K $ and is not allowed to loan the full ammount, because he must build a reserve of lets say 7%/per deal.(this is the part of the information a customer doesnt ever get) But he informs Mr. C that he can give a loan of 9,3K $ and Mr. C is happy with that, its better than nothing. Mr. C signs, now owned, he has to pay the full ammount back (+ 8% depts), because the money, thats set in the contract, IS STILL PROPERTY OF THE BANK!

When the money IS STILL PROPERTY OF THE BANK and even when Mr.A doesnt have it cash in his safe, he can continue to give out loans, all 7% smaller than the last one ( following max. loans in this case would be 8649$, 8043, 7480, 6956, 6469, 6017, 5595, 5204, lets stop here, i guess you got the point:

Mr. A and his bank does not make 8% turnover (by depts) out of 10K $ but in this case (and we stoped it, think on) out of 68917 $, which is a turnover of 5513$.

To make a turnover of more than 8K $ out of 10K$ capital is no problem at all for a bank. And in this case we had only 2 customers involved.
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So is that really a bank-licence? Or more a pawn-shop-licence we have here, i really doubt the first.

[dbelinfante]

Just happened to wonder what would happen if I gave this thread a

BUMP

[Grounder]

Originally Posted by dbelinfante

Just happened to wonder what would happen if I gave this thread a

BUMP

You are truely evil.

Just when we thought the thread was dead someone uses a resurection chip - lol

Grounder

[Nihilist]

Originally Posted by dbelinfante

Just happened to wonder what would happen if I gave this thread a

BUMP

somebody would probably post this smilie again:

then somebody else will end up posting a big long diatribe..

then the thread will fade off again...

until the banks are in game.

[argg]

Originally Posted by PiNerd

Yes I know there were only 5, but what im saying is that if they were made affordable (possibly on subscription) and there were not a limited number, MindArk would make more money, and Colonists would have more fredom win-win! And less money win-win-loose.

Being only 5 banks (pawn shops) allows owners to create a brand. What is more, allows them to create the brand beyond Entropia Universe.