The Crash Course

[marvenger]

Re: The Crash Course

thanks, this makes more sense. Damn, looks like I can't create money out of thin air and charge others interest for the privilege of doing so.... unless I get a bank licence.

[Rajiv]

Re: The Crash Course

How to Start a Bank

Instructions

Difficulty: Challenging

Things You’ll Need:

* Business plan
* Banking and/or business management experience
* $6 to $10 million
* Charter bank application package

Step 1

Evaluate how practical it is for you to start a bank. Look at your business experience. You will need to have business management skills, financial management skills and fund-raising skills.

Step 2

Get to know your market. Before you start a bank you need to find a hole in your current market. After all people are not going to come to a start up bank if they can't offer the customer something unique. If your local market is already saturated with banks consider moving your bank to an outlying area that is underserved by financial institutions, or consider starting an online bank.

Step 3

Recruit professionals to head the board of your bank. Look for people who you can work well with, for people who have banking skills and experience and for people who have business management skills and experience.

Step 4

Research the requirements your state has for starting a bank. You can find this information at your state's Department of Financial Institutions.

Step 5

Create a plan for raising the required capital funds for your bank. Search for investors, grant programs and ways to earn money to back your bank's start up. Expect to be required to raise millions of dollars for your bank's start up. California, for example, requires charter banks to have between $6 million and $10 million dollars in capital funds before their doors open.

Step 6

Download and fill out the required paperwork for starting a bank. These forms can be found online at your state's Department of Financial Institutions' website. This application packet will include a general information sheet, several questionnaires, financial reporting sheets and eligibility checklists. You will also be required to complete supplemental documentation to back up your request to start a bank. You may need to put together a proposal for your bank and you may also need to create a business plan.

Step 7

Wait for approval. This can take between several weeks and several months.

Step 8

Implement your business plan after getting approved by your state's Department of Financial Institutions. Start your fundraising, look for a building, acquire insurance and bonding, hire employees and develop a marketing campaign.

Also

Good time to start bank, says CEO

SCOTTSDALE - Bank takeovers and closures, soaring energy costs and a housing market that has yet to bottom out.

While current economic conditions are proving uneasy for some bankers, a group of investors organizing the Bank of Scottsdale is betting the shaky economy will send forgotten, disgruntled customers its way.

An independent study found that three major banks - Chase, Bank of America and Wells Fargo - control about 68 percent of Arizona deposits, said Lauren Kingry, president and chief executive officer of Bank of Scottsdale. But as the large banks concentrate on weathering the uncertain economy, they have virtually forgotten about their smaller account holders.

Enter the community bank.

"The past 18 months has moved us into a challenging environment," Kingry said. "It is a perfect time for a new bank that doesn't have the baggage of troubled loans to worry about. When we open our doors, we will have no bad loans on the books."
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[marvenger]

Re: The Crash Course

"The past 18 months has moved us into a challenging environment," Kingry said. "It is a perfect time for a new bank that doesn't have the baggage of troubled loans to worry about. When we open our doors, we will have no bad loans on the books."


Sounds like a good idea.

The name community bank sounds like their emphasis is on supplying the banking and credit needs of the community for productive growth rather than rent extraction. Not sure about the US but in Australia there are listed listed community banks which just automatically makes you doubt the adjective. Part of the business plan of this scottsdale bank you would hope would be to fill the hole of prudent banking; strict reserve ratio's, controls on detrivatives, strict lending standards, all done in a highly transparent way.

I just don't know if you could stay competive for long with such a model if the fire economy continues with 'the next bubble'. After initially feeling safe, depositors would start wanting to earn higher interest and borrowers would start wanting to take higher rewarding risks like everyone else, and pretty soon you'll probably have a declining business unless you join the crowd.

[Rajiv]

Re: The Crash Course

You should realize, that the problems are systemic, and do not necessarily lie with individual banks.

One of the major problems is the "time value of money" itself. It is a very useful concept, but its current implementation requires real economic growth -- which in turn is not sustainable. This is the probable reason why "usury" has been condemned through the ages. This by its very nature leads to a boom/bust phenomenon. Many solutions have been suggested -- but have not been widely implemented.

See some previous threads I have started on these topics

Open Money Manifesto

Slow Money Revolution: the global growth of local currencies

Toward an Independent Money System - The Role of Gold and Silver

Complementary Currencies

See also Tom Greco's site Reinventing Money

Complementary Currency Systems which has a very good online library.

You should also look at Margrit Kennedy's work

[marvenger]

Re: The Crash Course

Yeah I guess I was making the systemic point in a round about way. I really want to get into understanding the alternative systems, I'm getting a bit obsessed about this 911 truth stuff a the moment though. But, being realistic about the money system, its pretty hard seeing it changing given the momentum of the vested interests, oil vested interests are very powerful and their power is based on a very finite resourse wheras the bankers have an infinite resource. But then again disciplined minds says power lies in organising. I think sapiens also posted something on the constitution and self determination-it was a video with a lawyer going through the constition and saying the founding fathers were basically saying if you want things run a certain way you have to organise a bunch of buddies together and say this is how we're going to run things; if you don't like the way the federal government is going you have to band your group together and start running your group how you want to; it's up to the people to do this, or this is what I thought the jist of it was in the first mins. More and more stuff to investigate, it never ends with iTulip!

[Rajiv]

The Crash Course - New Chapter: Peak Oil

New Chapter on Peak Oil is up

[Rajiv]

Re: The Crash Course

THe Crash Course is now complete -- all 20 chapters