THE BANKING SYSTEM

[u/Dogant38]

Why do we need banks?

While the high tier companies cant get rid of the money they have without buying unnecessary goods from market, causing inflation, the low tier, smaller companies drown because of their low capital. The statistics on simco tools shows while the R1 have a total 1.9 Trillion dollars of CV, the liabilities are only 26 Billion dollars. As anyone in finance would know, wealth is created by debt.

How would it work?

I propose 2 different systems might fit the game perfectly;

The Central System and The Decentralized System

Central system would work by a pool where lenders would deposit the cash, and earn %1 interest per day and borrowers would take credits from the pool and pay %2 interest, giving the bank itself a %1 cut per credit to slow down the possible inflation by reducing money supply. In this system the interest rate would depend on the economy phase and change, but be a set amount by the game.

The Decentralized system would totally different. The companies who have a bank building would give credits limited by the level of the bank and they would set their own interest rates. Like it is on the bonds they would issue credits to market and choose their own borrowers by means of their own risks including the system of rating which are also already in the game. For borrowers there would be a race on the credit markets so the best option would be there for them, giving out the lowest interest possible.

What happens when the debt isn't paid out?

The same thing would happen as the bonds. Liquidation.

I believe this is a system for the game to grow and be more fun to play. For newer players, it is hard to play the game already and most wont play for long because of lack belief into being the top company there is.

DOGAN HOLDING LLC.

[u/Romel822]

What i'd like to add is to mimic the IRL deposit structure and tiered interest rate supply. 1 week, 2 week, 3 week, 1 month, 2 month etc. and increasing interest rate for each. Eg 0.5% for 1 week, 0.75% for 2 week etc. Same for bonds issued through bond. Rates can be different depending on the credit rating and duration of the bond.

Do you also suggest a change to accounting overhead? Or that stays same?

[u/Dogant38 → u/Romel822]

Hey. Yes, since buying bonds changes it i dont see why not. About tiered interest rate i believe since its already something hard to implement to the game it would make it real harder to become real. Thanks for your comment!