Bank interest

[Sir Henry Morgan]

I wholeheartedly concur with Danik and Kart - experience shows not all honor their agreements to repay, and some even abandon their loans when they leave Pirates Glory.

One would be fool hardy to lend others'(depositors) gold - even if it were to stay put, as borrowers tend to be quite fickle.

If you wish to earn interest on deposits, best open your own bank, deposit your treasure and lend a few loans yourself. Until there be more tools to collect bad debts, such as collateral loans, co-signers, etc., I won't even consider lending the gold of my depositors. And then, it would be prudent to pay interest - perhaps.

[Stan Rogers]

Aye, I too will echo the sentiments laid out on previous posts. Currently, my loan default ratio is greater than 66% therefore,no loans are being issued until I can get some sort of guarantee it will be returned. There is much to learn about banking to the uninitiated.

[Gunder]

I agree with Danik and Kart, it seems foolish to loan out the deposited gold. The people who deposit gold are looking for security, not profit. I would even be willing to pay a negative interest if I knew that was the safest place of my hard earned gold.

That being said; I can't see why it should not be an option for the bankers. I can say for myself that I would not choose a bank with 1-2% interest if I did not trust the banker. But some might? It could be a way for a new banker to build his portfolio of customers.

Another option. The bank could offer interest on deposits if the customer signs a contract of not touching the money for a given period. Let's say a month. Each month the customer can choose to renew the contract and let the money build up interest for another month. This would maybe let new bankers build up funds for loans.

Disclaimer: The above opinion is based on the real world banking system, I do not have any first-hand experience of the Avonmora banking system, so my apologies if some of it doesnt make sense.

[Most Lee Harmless]

Aye, I think my fellow bankers are pretty agreed that some form of fixed term deposit would warrant interest being paid : then we can make lending decisions knowing those funds will be in place over the term of any loan offered. But that's just half the story : we also have to be fairly certain that the loans made using those funds will be repaid on time and in full : as my esteemed colleagues mention, that is not a given by any means. To illustrate : if I make 10 loans of similar size and structure the loans to return to me 10% over their term, then it only needs one of those ten loans to fail to repay and I will have made an overall loss. If I then have to pay interest to depositors on the same sums myself my loss is compounded further. So, to be realistic, I don't really want to be 'borrowing' my depositors funds to be making unsecured loans when it's all, at the moment, far too high-risk for that. Until there are some forms of securing or under-writing loans, then the risk of total loss is being carried by the banker : add further to a banks costs of doing loan business without reducing the banks risks and the maths of offering loans will never add up in a banks favor and I wouldn't trust a banker who thought they could.

I'll agree to interest being paid on 'current' accounts the same day I get the right to close your account and return your funds as 'not needed'. Then you can bury them back in the ground and hope no treasure hunters find them.

[Francois le Clerc]

I bank anywhere I mean dont be surprise SHM removes some of your coins cause you know they going back..
A new bank removes your coins you raid him/her in a hr without any knowledge why he did it,ain't that true?

Now I dont give a sloop where mi gold is in the bank or in yah pocket just dont spend in one place.

[Brazzler]

If it is the same problem for all bankers then maybe there could be "long term accounts" created. They would work by people depositing a sum of money, (say a minimum of 2.5 mill) and choosing a date, that account would then freeze and only the bank owner would be able to use the money until the decided date comes along and the person could change the amount in the account and define a new date.

Lets also say that interest can only be earned on these long term accounts.

[Trixikilikili]

i like the idea of time deposits. +1

[Barnabas Sackett]

+1
Also, i think it would help a lot if we had a credit rating system. Maybe banks could all pay a trustworthy individual with a good amount of free time to keep track and send reports to banks considering a loan. Then we can have credit sharks, like pirates, who buy debts and take care of business. Just speculating.

[Kart]

I have thought about this a good bit and have come up with some conclusions of my own. First, Danik is right about if you have one loan go bad you have lost out. I had stopped even considering loans due to this very point. I see two remedies for this, only loan to players I know are stable players or loan to those I don't know at a higher interest rate. I have made my mind up about this so those I don't know can expect loan offers consisting of rates starting at 15%. Those I do know can still get rates as low as 5%. These rates will be based on how secure I feel about loaning my own gold to another player.

As for paying interest, I have thought about this also. Yes, long term accounts would help with stability, but as Danik pointed out, we can't tell people to take their gold and leave if we don't need it. So, basically paying interest would be me taking out a loan from anyone whether I needed the loan or not. I now say no to interest rates being paid to depositors. If I was in a position where I did not have the gold to make the loans and the loans were profitable it would be a different story. Then I would be glad to accept "loans" from depositors to earn more gold. That unfortunately is not the situation at this time.

-1 to paying interest rates

Kart has left the building!

[Brazzler]

Well, that is a good argument. Maybe you could change the rates to something like 50 percent of what you earn. Or maybe the "long term accounts" could be requested by the player and the banker can decide weather they want to accept it or not.

Either way, I'm sure we can find some middle ground.