Re: I want to set up my own bank
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opmtrader
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- Joined: Thu Jan 01, 2004 12:00 am
Re: I want to set up my own bank
Yeah nothing is worth going to jail. Seriously I wouldn't want to expose peoples money to risks they didn't know about. I was just curious about the mechanics of the whole thing. Do banks have to disclose who they are lending to in specifics in any kind of annual report? If so I've never gotten one.
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opmtrader
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- Joined: Thu Jan 01, 2004 12:00 am
Re: I want to set up my own bank
Speaking of jail and fraud, I just read that Lindsay Lohan's dad did time for stock fraud. Any of you NYC playas know this guy? More importantly can anyone get me a date with his daughter?
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kr
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- Joined: Thu Jan 01, 2004 12:00 am
Re: I want to set up my own bank
>>> Seriously I wouldn't want to expose peoples money to risks they didn't know about
um, don't really know a nice way to say it... you have a lot to learn Cool
anyhow, this appears relevant
http://www.fdic.gov/regulations/safety/manual/index.html
also:
http://www.fdic.gov/bank/individual/failed/index.html
um, don't really know a nice way to say it... you have a lot to learn Cool
anyhow, this appears relevant
http://www.fdic.gov/regulations/safety/manual/index.html
also:
http://www.fdic.gov/bank/individual/failed/index.html
my bank got pwnd
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JabairuStork
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- Joined: Thu Jan 01, 2004 12:00 am
Re: I want to set up my own bank
bank wires clear through the fed wire system in the US, swift or euroclear, I believe in europe. All these things are big computer networks that talk to each other. Every wannabe supercriminal dreams of hacking into the system, but the technology is so antiquated that it is incredibly difficult to hack with any kind of modern computer. Maybe if you know how to make those dial tone noises with your mouth and cover the holes in punch cards you could do it.
The reason banks don't just take deposits and invest in super-risky assets while paying sub-libor rates is a little thing called regulation. It does not always work, but you need to be aware that you are breaking the law (at least in the US, I don't know other countries that well) if you take bank deposits and use them to fund some hedge fund speculative vehicle.
Any financial institution that wants to take advantage of the infrastructure, like the fed wire system, the discount window, the FDIC insurance, etc, is supposed to abide by the relevant laws and regulations. In theory, you could set up a bank in an unregulated jurisdiction and pretend it was not a financial instution. For example, you could set up a brothel in the caymans which just happens to hold lots of cash as a favor to the customers. You can now do whatever you want with the cash.
The hard part is getting it back in to the banking system of a major country, because no real bank is going to accept a million dollar wire transfer from the first brother of grand cayman for the account of John Q. Anonymous without reporting it to the feds. Or interpol. Do they still have interpol?
The reason banks don't just take deposits and invest in super-risky assets while paying sub-libor rates is a little thing called regulation. It does not always work, but you need to be aware that you are breaking the law (at least in the US, I don't know other countries that well) if you take bank deposits and use them to fund some hedge fund speculative vehicle.
Any financial institution that wants to take advantage of the infrastructure, like the fed wire system, the discount window, the FDIC insurance, etc, is supposed to abide by the relevant laws and regulations. In theory, you could set up a bank in an unregulated jurisdiction and pretend it was not a financial instution. For example, you could set up a brothel in the caymans which just happens to hold lots of cash as a favor to the customers. You can now do whatever you want with the cash.
The hard part is getting it back in to the banking system of a major country, because no real bank is going to accept a million dollar wire transfer from the first brother of grand cayman for the account of John Q. Anonymous without reporting it to the feds. Or interpol. Do they still have interpol?
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opmtrader
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- Joined: Thu Jan 01, 2004 12:00 am
Re: I want to set up my own bank
kr, yes the way I said that sounded pretty naive. I am sure most people do not understand the entirety of risks involved in >90% of what they invest in. I'm sure I'd be amazed by the positions my bank was involved in. I still think creating a bank as a fund raising front for a hedge fund would be a pretty bad idea (even though I proposed it). In principle the idea of a bank should be a place safer than under your mattress to keep your money. Sadly the S&L scandal and the various bank runs throughout history show otherwise. I'm sure this is what you were trying to point out to me.
Anyhow in an effort to be a little more informative (and make up for my Lindsay Lohan inquiry), here is a listing of companies that provide ratings on the financial safety of banks. You can order their reports if so inclined. I hope they can help anyone concerned about the saftey of their money.
www.idcfp.com
www.veribanc.com
www.weissratings.com
Anyhow in an effort to be a little more informative (and make up for my Lindsay Lohan inquiry), here is a listing of companies that provide ratings on the financial safety of banks. You can order their reports if so inclined. I hope they can help anyone concerned about the saftey of their money.
www.idcfp.com
www.veribanc.com
www.weissratings.com