The State of SL Bank

SL Bank stats:

Hello everyone. We have been receiving an unprecedented number of IMs over the past month inquiring about our project. To try and allay the workload of responding to many IMs asking similar questions, we have decided to post some statistical information on the bank. You are welcome to post questions or concerns here or send an IM to Teufel Hauptmann in game. Information found on our note card or in other threads will not be posted.

SL Bank opened: 6/05/06 (approx 1.5 months ago)
ATM Locations: 1
Current information as of July 21st, 2006 9:42pm
Recent stats:
Total number of active accounts: 252
Total amount of money in bank: 872514.9255L
Total Interest Paid Last Application: 2083.8672L
Today's Withdraws: 1164.0000L
Today's Deposits: 41391.0000L
Today's Volume: 42555.0000L
Today's Transactions: 37
Today's Change: 40227.0000L
Yesterday's Withdraws: 12085.0000L
Yesterday's Deposits: 188210.0000L
Yesterday's Volume: 200295.0000L
Yesterday's Change: 176125.0000L
Yesterday's Transactions: 32

Transactions above do NOT include balance checks.

Current interest rate is based on Tier. Interest rates have fluctuated between .11% and .257% daily.

Average account balance: 3,463L$

Investments: Currency markets including LindeX, ForeX. Some small cap stocks. Advertising. Land Holdings. Will be further diversifying into lower risk investments, thus lowering interest rates slowly over the coming months.

Future addition: Soon to offer three investment accounts. Higher risk/high return (current), med risk/med return, low risk/low return. Account holders can choose any one or a combination of all accounts.

Profit:
(Total holdings of SL Bank investments + liquidation of bank assets) minus (Total deposits + total interest paid + cost of database admin & service + cost of land tiers & other SL related fees)
Currently (approx):
(906,264L$ + 3,000 + 30,000) - (872514.9255L$ + 5,000L$ +5,400L$) = +56,350
Bank is currently up: 56,350L$

Profit is used as a buffer against bad days, as well as used for experimental uses (high interest rates, unexpected changes in interest rates) and/or expanding the bank.

Information and data collected during this project is in its infancy and will not be released at this time.

Cheers!

Just another Ginko...

Let me ask you this... Do you have a problem if I deposit L$1,000,000 at 11:59p, collect my interest at 12:00a, then withdraw my L$1,000,000 + Interest at 12:01a?

As you are paid interest based on your average account balance for the day and not simply your balance at midnight, you'd receive only one min worth of interest. We also have an 'instant withdraw' limit per day of 10,000L$ without being cleared by a bank manager...

Cheers!

10KL is about 30USD, IIRC. Is this limit lower than Ginko's L$100,000 because you have less invested in total?

If so, are you aware that having a low daily withdrawal limit scares away customers who have lots of money to invest, because they don't like the idea that they can't access their savings when they really need them?

Thanks for the information. You have saved yourself some IM trouble already. <smile>

Hi there and thanks for your post. We are able to process any amount of withdraw within a 24 hour period, usually less. Our 10,000L instant withdraw limit is based on total reserves and past account holder behavior and will grow with time.

We are a small banking project whose main focus is on our customers and collecting relevant data. As we have no desire to grow large overnight, we have no problem with having smaller balance account holders at this time, although it should be known that we do have a growing number of depositors whom are considered "Platinum Tier" status, meaning an average account balance of 50,000L$+. We recommend anyone with a balance over 100,000L$ to transfer those funds into a real world investment option at their local bank, although the choice is up to them.

Prost!

Ohhh I see, restrictions on withdraws. Just like Ginko. Instead of a Bank, its more like buying a (CD). And with the declining Linden Dollar, it makes for a great way to short the market.

Care to disclose how you will profit to make payments on the interest? In the real world, banks take 93% of their deposits and loan out the cash at a higher rate than the interest they pay the depositor. But in SL, any type of loan would be unsecured and highly risky. Which makes me doubt you'll be loaning L$ in SL. So the questions is, where are your profits coming from to pay .0011% daily to a despositor?

All information on what we invest in, risk, how we make int payments, and who we are can be found on our note card found by clicking our ATM at our bank location. There is a good deal of information in older threads, as well. We also give a little info on what we invest in on the original post of this thread. Although our investment strategy is changing slightly over the next few months.

Cheers!

Translation: You restrict my L$ withdraws because you sell my deposits of L$ on the LindenX for US$, to then wheel and deal in the Forex Markets and such. Maybe some cash in Forex, some in Buying/Selling SL-Land, RL - Commodities, etc...

Not that it is bad, it just puts more selling pressure on the L$. Which only tells me, that Second Life needs more In-Game Investments. Thus keeping the L$ in SL assets, making the currency more valuable...

Like I've said before, we need a Bond Market. Residents issue bonds against their land at a certain rate. They pay interest on those bonds. If they default, their land is taken and put up for sale. Proceeds are given to the bond holders. All the while, bond traders can buy/sell bonds which will vary depending on its yield, credit history of the issuer, etc...

Lets say John Doe is known to default 80% of the time on his bond/interest payments. That bond would be tagged as a high risk with a high yield. The tagging would come from scoring of an issuer by the bond holders. Good Scores give issuers the ability to set low yield rates (ie: 2%). The bond pays a low yield, but you know that issuer is good for the money and won't default. Others with terrible scores might only have the ability to issue bonds with a 20% yield. The yield is great, but chances are, that issuer will default next week before they make good on their payment.

Personally, I think Bonds are a great idea for SL.. It gives every land holder the ability to leverage their land asset. Putting quick cash for whatever in their pockets. The flip side of that gives investors the ability to pour investment dollars into L$ denominated assets. Driving demand for L$ dollars and increasing its valuation.

As for risk. The issuer has the risk of losing their land if they default. The investor has the risk of an issuer defaulting, seizing their land, selling it, and hoping to recoup their investment from the land sale. Most likely a process that is farmed out to a land baron who would take a cut of the sale for commission.

Yes, we have been trying to shift more of our investments in game, but due to restrictions on investment and loan options, what we can do in game is greatly limited. Good luck on your bonds idea. You never know what could happen in our virtual world...

Cheers!

RBD,

Why don't you start a bond market?

If I understand correctly, you would not need much initial investment of your own. I think what you would be selling at
that point is trust.

And at the risk of sounding dumb, in the figures of the lead post
why is there 4 digits in the cents column is that how fractions
of L are customarily dealt with as I do not usually see them.

And is Ginko still around?

I'm sure the State Bank is listing fractions because paying out percentages will yield fractions of a penny. But since SL doesn't have pennies, only single dollars, the fractions are for accounting purposes only. For instance, if somebody deposits L$1000 and the bank pays them .0011% interest daily, day 1 they receive a payment of L$1.10. Since the .10/cents can't paid if the depositor withdraws, its kept as an accuring record until a whole number is reached.

As for me starting a Bond Market, the risk is too great. There is no way to secure the bond. The trading of bonds isn't the problem, its dealing with defaults. There are a few ideas I have about mitigating the risk and coupling that with growth. But I'll have to ponder it some more. Auf Wiedersehen

Highlighted for attention.

He won't get far selling that given his history of bad financial predictions.

Hi there. Sorry if the decimals confused you. We use decimals as to allow interest to accrue for even very small deposits. (Even 1L$ grows over time).

Cheers!

We are actually named SL Bank, not State Bank, although this is a thread on the state of SL Bank

You are correct about the fractions of a penny.

Prost!

I'll use a new alt that spews peace, love, and stipends. You will submit..

My trolldar will go off, as well as my BS detector, so don't bother.

I'm gonna bother... So stock up on batteries, your dar's will be going off 24/7...

*dies* at thoughts of having a bank in SL. you do realise that banks are the scource of all evil.

No-one in SL needs a bank -- the client keeps our Lindens and maintains our balances. Why diddle with some stupid bank and a banker who may disappear with your Lindens?

They are methane powered, so they won't ever run out when you're around.

You speak as if the world centered around your worldly ideals. You might not need a Bank, somebody else might. To some folks, depositing money and being paid a daily interest rate is appealing. Even with the risk. You might not like risk, others thrive on it. To each, his own.

Everybody has a choice. If you don't like the changing times, click the ignore button and all you'll see is your own little world.

but SL banks cannot possibly offer so high rates that no RL bank would ever try to provide, how a bunch of amateurs could do better than well known banking giants? exepted by scamming theyr customers and fooling them with walls of sparkling perlimpimpim powder ?

Investing in our bank is more risky than a savings account in the real world for example, as we say on our info card, but is no more risky than a real world portfolio involving aggressive investments in both stocks and currency markets.

Several people helping with this project have worked at many of the elite investment firms of which you speak. There are options available at even real world firms which offer higher risk/high return investment options. You may want to look into them if you are interested. We will be offering low risk/lower return accounts in the near future.

SL Bank is not any kind of scam. We plan to return all money placed in our accounts plus all interest paid to all account holders if/when we finish and close our project.

Cheers!

Teufel, thank you for being open and professional in your posts (especially when dealing with a multitude of morons who think they know it all, and enjoy typing and rereading their own posts)...

Teufel, would you mind telling me some of your RL background?