Linn Stanton <lstanton@sten.lehman.com> writes:
hughes@ah.com (Eric Hughes) writes:
[I read somewhere] ~"The cost of compliance in a typical USA bank is 14% of operating costs."~
The real figure we need is not the US cost of compliance, but the difference between US costs and costs in other major banking markets.
From the customer's point of view, if not the bank's point of view, there is the cost of creating and maintaining all these laws, agencies, and regulations. So not only the bank customers end up somehow paying the bank's cost of compliance (as typically the individual customers may be less susceptible to foreign bank competition than the shareholders who may be more easily convinced to invest in foreign banks), but the tax
Well... not if we compare to an unregulated cypherbank. What WE (cypherpunks) need to know is also how much of our taxes go to the government side of this regulatory activity. I'm not sure cypherpunks are ready to wait for deregulation to happen :-) payers (be they customers or shareholders) end up paying the government side of this regulatory activity. Complete the picture by figuring in there the taxes paid by the bank to maintain the regulations ;-). Perpetual Travellers who bank in cypherspace and run cypherbusinesses for fun and profit end up winning several ways. Their banks can afford to pay better interest and charge less per transaction. They are not taxed to fund regulatory efforts, and they have a competitive advantage over regulated businesses. (In the short term, though, they have a major reputation (or lack thereof) or tradition problem to overcome.) They also take risks (testing unproven markets, trusting unproven business and crypto protocols, losing money to penultimate transaction cheaters...) Pierre. pierre@shell.portal.com