From: dwomack@runner.utsa.edu (David L Womack)
Date: Mon, 17 Jan 94 18:03:34 PST
To: cypherpunks@toad.com
Subject: Internet Banking
Message-ID: <9401180200.AA16565@runner.utsa.edu>
MIME-Version: 1.0
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As a recent subscriber, I'd like to ask a question or
two regarding banking...

1.  Such a bank would clearly need to be
offshore, and in a location with no banking
or taxation treaties with the US.  Some of these
are available, but, the record of quality
accounting and regulation isn't always the best.
What is the feeling about what depositors would
want from such a bank before they "did business".

2.  What is the minimum list of services a bank
should provide?  Deposit and transfer between
inhouse accounts would be easy...wire transfer
elsewhere would not be a problem...even handling
some investments could be done.  On the other hand,
things like unsecured loans, credit cards, and immediate
access to someone in "account services" would be a lot
more difficult to implement.

3.  What minimum account size would be appropriate?
Domestic branches of offshore banks (i.e., Union Bank of
Switzerland) generally require 100M, but the branches are
subject to US record keeping requirements.  Offshore,
$1,000 or less is common.  Would such levels, in your
opinion, work?

4.  Statements.  Generating statements is time and
accounting intensive.  Generating statements on
checking accounts is NOT cheap.  Would accounts
have to have scores of small transactions (i.e., $25
bucks for the xyz bill), or would it be possible to
merely feed a domestic account from the offshore 
account.

5.  Currency.  US dollars?  Swiss Franks?  Other?  Foreign
currency is a nice option, but would up the costs for a
startup bank.

6.  Yield.  Would depositors demand a yield?  Current low
rates at US banks seem to make this unimportant, but is it
really unimportant?

7.  Fees.  What level of fees could the bank charge?  A
regular US checking account for a small business can cost
$10 a month...

8.  Any thoughts about marketing?  Offshore banks, as I
understand it, cannot lawfully advertise their services 
within the US.

9.  Other thoughts?  What do YOU think would be needed, unneeded,
nice to have, in such an entity?  What would frighten potential
customers away?  

Thanks for any thoughts you might have.