Starting a Bank
ma.tt
Starting a Bank
1–10 of 68 posts
Re: Starting a Bank
#2There are a whole bunch of reasons why this would be nearly impossible, but it's an interesting thought experiment nonetheless.
Re: Starting a Bank
#3This will probably not happen when there are too much regulatory barrier to start and too many rules to comply with.
The more improtant something is, the more likely it will be highly regulated, or monopolized.
Re: Starting a Bank
#4Sounds like he wants to start a full-reserve bank: https://secure.wikimedia.org/wikipedia/en/wiki/Full-reserve_...
Not impossible - after all, banks were not always fractional-reserve, and it admittedly is a very secure form of banking.
Re: Starting a Bank
#5"We take your money and put it in a vault"
That's not actually the job of a bank, is it? The job is to mediate lending and borrowing of money. By identifying the right people to lend money to, banks can offer the people whose money the take an interest rate.
I still agree that there is a market for a better bank.
I remember an example from the book "Why not?" where a bank (or something like that) offered to automatically adapt their customers to the best current interest rate and making a killing with it. No more "if you open an account now, you get 2%" and one month later "if you open an account now you get 4%" and two months later "if you open an account now, you get only 1%".
Re: Starting a Bank
#6There are a whole bunch of reasons why this would be nearly impossible, but it's an interesting thought experiment nonetheless.
I don't like this comment. At least give me a hint why it would be "nearly impossible". You won't be able to do it with three guys in a basement, but I can't see how it would be "more impossible" than any other large corporation. If there hasn't been some recent change in regulation, it is probably a lot easier now then 10 years ago.
Re: Starting a Bank
#7Sounds like he wants to start a full-reserve bank: https://secure.wikimedia.org/wikipedia/en/wiki/Full-reserve_... Not impossible - after all, banks were not always fractional-reserve, and it admittedly is a very secure form of banking.
Not full, just a higher fraction.
Re: Starting a Bank
#8There are a whole bunch of reasons why this would be nearly impossible, but it's an interesting thought experiment nonetheless.
I don't like this comment. At least give me a hint why it would be "nearly impossible". You won't be able to do it with three guys in a basement, but I can't see how it would be "more impossible" than any other large corporation. If there hasn't been some recent change in regulation, it is probably a lot easier now then 10 years ago.
It's harder than many other large corporations because banking laws vary from state to state, and there are federal laws restricting banks operating universally across several states. Also, as a 'startup bank' you are initially reliant on your incumbent rivals for clearing and interbank transactions (unless you do literally leave cash in a vault at 0%).
I agree technology has made it much easier recently though.
Re: Starting a Bank
#9"We take your money and put it in a vault" That's not actually the job of a bank, is it? The job is to mediate lending and borrowing of money. By identifying the right people to lend money to, banks can offer the people whose money the take an interest rate. I still agree that there is a market for a better bank. I remember an example from the book "Why not?" where a bank (or something like that) offered to automatic…
Well why not differentiate the product by allowing the bank customers choose where the money is getting invested, kiva-style. And yes, there is a ton of risk there but it's unique.
Re: Starting a Bank
#10The 3-6-3 model of banking has been thrown off to the wayside in pursuit of faster, quicker gains; but the original model still holds: savings at 3%, loans at 6%, golf course by 3pm.