New Banking Loans Idea

Guest · Post by **Guest** » 24.02.2010, 17:47

The loan system doesnt work, right? reason for that was it was too buggy and dangerous for your account. So why not make it work again but it has a big warning like this,

BEWARE
THIS HAS GLITCHES AND CAN DAMAGE YOUR ACCOUNT

Then people will use it carefully or not at all and we get back a proper banking sector. Also no-one can complain because they were pre-told and was there own fault in the first place using it.

Guest · Post by **Guest** » 24.02.2010, 17:52

I don't think it had bugs in it...
the thing is people took too big loans, and couldn't pay back, so their accounts got closed/locked and the game lose players.

Guest · Post by **Guest** » 24.02.2010, 17:53

Well then they would be warned

Guest · Post by **Guest** » 24.02.2010, 17:54

doesn't metter...
lose account => leave the game => less players => less coins buyers => less money

Guest · Post by **Guest** » 24.02.2010, 18:42

If the only problem with the bank was that people were defaulting on loans...that seems kind of silly to me.

The first and best solution, I already proposed - make loans player driven; that way it's not threatening the integrity of the game if they fail to repay. It's up to the lender to make sure its borrowers are credit worthy; losing money on bad loans is part of that business.

The next solution is to make loans secured - allow people to borrow no more than the asset value of their company; and don't allow them to sell more assets than the amount of their loan balance.

This is worse, because it severely limits the amount of borrowing that can be done, but it also eliminates the need of locking accounts/chasing off players.

Getting rid of a bad loan is as simple as buying a few coins, though, so I don't even see why it was a problem in the first place.

Guest · Post by **Guest** » 24.02.2010, 20:33

My idea will involve very little change just a big warning sign at the top of each banking page, simple.

Guest · Post by **Guest** » 24.02.2010, 21:23

Tusah wrote:If the only problem with the bank was that people were defaulting on loans...that seems kind of silly to me.

The first and best solution, I already proposed - make loans player driven; that way it's not threatening the integrity of the game if they fail to repay. It's up to the lender to make sure its borrowers are credit worthy; losing money on bad loans is part of that business.

The next solution is to make loans secured - allow people to borrow no more than the asset value of their company; and don't allow them to sell more assets than the amount of their loan balance.

This is worse, because it severely limits the amount of borrowing that can be done, but it also eliminates the need of locking accounts/chasing off players.

Getting rid of a bad loan is as simple as buying a few coins, though, so I don't even see why it was a problem in the first place.

Player driven- This can lead to people cheating by making alt accoutns and sending money between them via this system. Also what "credit worthy" people would require loans.... Not many, so it would be a large addition feature which could promote cheating and fall flat on its face, what stops people jsut never paying the loan back?

Also loans WERE secured. you could only borrow up to 10% of your FA. That is where the issue came in, when players with like 8billion caps FA borrowed 500mil and when they defaulted they lost 8bil worth of assets....

Guest · Post by **Guest** » 24.02.2010, 22:05

felixbluindustries wrote:Player driven- This can lead to people cheating by making alt accoutns and sending money between them via this system. Also what "credit worthy" people would require loans.... Not many, so it would be a large addition feature which could promote cheating and fall flat on its face, what stops people jsut never paying the loan back?

Also loans WERE secured. you could only borrow up to 10% of your FA. That is where the issue came in, when players with like 8billion caps FA borrowed 500mil and when they defaulted they lost 8bil worth of assets....

People can already make alt accounts and do the same thing by sending cheap contracts; if there's no mechanism in place to catch people using alt accounts now then what difference would it make if this was added? If there is a mechanism - then it already exists, and the same mechanism would catch bad loans as catches bad contracts.

Your comment doesn't make any sense - 'credit worthiness' doesn't mean 'you can afford to payoff the loan today' it means that 'you have shown a strong and sustained financial history.' Part of the problem with Kapi is the cash hoarding, it's completely unrealistic and is a destructive mechanic in the game (large companies prey upon cheap market goods, eliminating the ability of smaller companies to take advatnage of prices; paradoxically, the massive oversupply of cash drives up prices due to inflation). The loan situation wouldn't solve it, but it would at least enable those that have good business practices to expand their business at an indefinite rate.

I didn't know loans were secured then (I'm a ralatively new player); what was the reason for laons being secured with 100% of the debtors assets, regardless of the loan balance? That doesn't make any kind of sense, no wonder the system fell on its face. If I borrow $20 from you and fail to pay you back- you take my house? That's silly. If you borrow $100Mln and you have 8 factories worth $8Bln; the bank should seize 1 of the factories, sell it for as much as it can at auction (let's say $500Mln), take their loan amount plus interest (call it $110Mln) and then give the remaining $390Mln to the player.

I just assumed it was a programming code problem; if your explanation of the Fixed Asset seizure is correct it's no surprise that banking failed. That would be ridculously punitive.

The purpose of making it player driven is to eliminate any programmer interaction required once the game code is created. If players are making the loans with their spare cash (retained earnings, positive cash flow - whatever) they are risking their own positive cashflow; there's no 'risk' that the Kapi Financial System will collapse because each player is still insulated from every other player (in the sense that they retain everything they had to start with if the loan goes bad - except the cash from the loan). Player driven loans (aka Debt Offerings) allows loans to exist without any risk of a default-loss because the risk exists up-front (just like when you buy from the market - your cash goes away first, then the product is delivered to the warehouse).

Guest · Post by **Guest** » 25.02.2010, 00:08

The system does notice bad contracts as if you sell at an extreme advantage to either side it gets noted and IP's etc are checked and overall it is stopped. In a loan though you are giving money to someone... That's an extreme advantage... but that;s the way it is meant to be, therefore the mechanics would not be able to detect and stop this happening.

And yes that is the entire reason the banking system fell on its face and suggestions about your idea were made but the programmers simply thought it was an under used feature and that it served no more use in the game.

Also the "money lost part" That is essentially scamming and in a real life situation the people would be taken to court etc... what do you say happens with 2 players? Admins won't want to get involved in every little fight and moan, it would require more effort than programming a whole new NPC system.

Also the way you talk about loans is small amounts of maybe 10million caps fro ma billionaire player... well no, the loans would be large amounts if this sytem were bought in, and what stops a player making another account, asking a guy they hate their rival etc for a loan on the new account, getting load s then resetting the account.... There are jsut oo many flaws in the idea for it to be seen as feasible I'm afraid.

Guest · Post by **Guest** » 25.02.2010, 01:35

felixbluindustries wrote:The system does notice bad contracts as if you sell at an extreme advantage to either side it gets noted and IP's etc are checked and overall it is stopped. In a loan though you are giving money to someone... That's an extreme advantage... but that;s the way it is meant to be, therefore the mechanics would not be able to detect and stop this happening.

And yes that is the entire reason the banking system fell on its face and suggestions about your idea were made but the programmers simply thought it was an under used feature and that it served no more use in the game.

Also the "money lost part" That is essentially scamming and in a real life situation the people would be taken to court etc... what do you say happens with 2 players? Admins won't want to get involved in every little fight and moan, it would require more effort than programming a whole new NPC system.

Also the way you talk about loans is small amounts of maybe 10million caps fro ma billionaire player... well no, the loans would be large amounts if this sytem were bought in, and what stops a player making another account, asking a guy they hate their rival etc for a loan on the new account, getting load s then resetting the account.... There are jsut oo many flaws in the idea for it to be seen as feasible I'm afraid.

I'm not arguing to be belligerent, I'm fine with there being no bank in the game. I want to understand why it was decided there shouldn't be a bank, and (since so many people seem to keep re-requesting it) what could've been done (understanding that it probably won't be) to do it 'right.'

How would there be a scam? Think about a loan as an investment. Throw out the player aspect of it; You invest in Product X, expecting to make a profit. Instead, you underestimate what the cost of raw materials to be (or whatever) and end up having to sell everything at a massive loss.

That can happen now, in the game today. That's no different than what happens when a loan goes bad - you lose your 'investment' in the player's company. What conflict would there be? Just like with any other business - if you go into it and lose your money, it's not for the Admins to solve - it's your problem. Should've done more research.

The size of the loan is immaterial. I don't recall talking about specific prices (other than as a part of the test case) - but, I don't think you would lend $30B Caps to a brand new player - regardless of the amount of money we're talking about

That's part of the 'common sense' thing - if the problem was that people were borrowing unlimited amounts of money all the time - well, we have a global financial crisis caused by the same thing. Unlimited borrowing doesn't make any sense - because then what's the point of playing? Just borrow a trillion caps and be the biggest company in the game.

I disagree with the 'cheating' you're mentioning. It's against the rules to have multiple accounts; and there are ways of detecting this (same IP, same hardware config, same password, et al). They already ban accounts that have multiple owners. Why would it be so hard to do the same with loans? I don't see how a loan is a bigger advantage than sending someone a massively discounted contract - in fact, the contract is better, because there's no return for the sending player (and what you get becomes pure profit when you sell it in the market). With a loan, there's an obligation to repay the borrower.

You imply that players would steal (that is, just walk away from their loans). While I would hope this would not happen - there are ways to make the system handle this through programming (like 'wage garnishments'); and also, that's part of the risk of lending to someone. If I lend you $20Mln (caps), and you walk away - well, I shouldn't've lent you $20Mln, now should I? I would have to make a bad mark on your credit (something I think Kapi needs anyway - a 'customer rating' that shows how reliable a player is on negotiated deals), and the system would be able to report that you didn't make a payment on your loan, per the terms of the contract.

I know it's complex, and as I said, I don't have a problem with it not being implemented...but I don't think the reasoning being presented makes sense. There's a case to be made for "it's too complex" - there's not really a case to be made for "there's no way to do it."

Guest · Post by **Guest** » 27.02.2010, 12:13

Lets clear this up, my idea is we replace the picture of the Lady with a big warning sign. This requires very little programming and no-one has an excuse to complain.

Guest · Post by **Guest** » 27.02.2010, 14:39

wont happend. there's a reason they took it out of the game.

Guest · Post by **Guest** » 01.03.2010, 21:09

Yes, there you are correct, ILIYYILI, correct in both ways:
There is a very good reason why the bank was removed and the bank will not return.

kingrewt, sorry, but the KapiBank is part of Kapilands' history.