[HN Gopher] Seeing like a bank
___________________________________________________________________
Seeing like a bank
Author : arkadiyt
Score : 331 points
Date : 2023-11-07 18:07 UTC (4 hours ago)
(HTM) web link (www.bitsaboutmoney.com)
(TXT) w3m dump (www.bitsaboutmoney.com)
| DamonHD wrote:
| Insightful and nicely written. I spent decades in finance
| including investment banking and as a director/founder of a small
| retail operation. A lot of this really rings true.
| A4ET8a8uTh0 wrote:
| It also managed to hit home some issues I experienced recently.
| Long time ago, I was a teller/banker and I was still selling,
| but the recent experience of in person account opening was just
| bad ( no rate quote, disclosures thrown at the end for the sake
| of compliance, and promise of a call back for an issue I raised
| that I never actually got.. come to think of it ). The poor kid
| did not know anything about what he was selling and that was
| basic UTMA savings.
|
| Anyway, what I am saying is that is well worth the read;
| especially the bit about constant firefighting.
| csours wrote:
| There is something about this that I'd like to be able to
| communicate better [0]:
|
| Organizations are made of teams. That sounds super obvious, but
| it means that any change request is going to go to a team (or
| teams).
|
| From the outside, it looks like a corporation has effectively
| unlimited resources; on the inside, any particular team has very
| limited resources. The team may have just been downsized, lost a
| lead, been reorganized, etc.
|
| 0: Better than I currently can, not better than Patrick.
|
| Funny quote:
|
| > That retail user is extremely unsophisticated about the bank
| account, finance in general, and frequently many other things in
| life.
| pixl97 wrote:
| Large organizations are made of "money saving entities".
|
| I work with a lot of large corporations and we have constant
| problems with the software I support because the imperative is
| to continually drop operational costs. We'll have a team we
| work with that is well trained, understand the software well,
| and keeps the software working at near 100% capacity.
|
| Then suddenly one day they are all gone and you get the
| offshoring team that knows nothing about the specialist
| software they are attempting to support, if they have the
| capability to actually turn a computer on is surprising.
| Software availability drops significantly having direct impact
| on deliveries, costing god knows how much in some of these
| companies. Support on the vendor side (my side) turns into a
| huge expensive mess because now you're now writing instructions
| to the level of "when you take a poopy, remember to flush and
| pull your pants back up".
| csours wrote:
| > Large organizations are made of "money saving entities".
|
| Working for a cost center vs. a profit center will make a
| huge difference in your professional life.
| kccqzy wrote:
| I simply cannot upvote this enough.
|
| I also believe this is a hard problem to solve. The
| partitioning of an organization's resources into teams is
| inherently messy and inefficient. One has to consider internal
| politics, egos of middle managers, or preferences of
| individuals when staffing teams within an organization. The end
| result is often far from what's the best for the organization
| overall.
| ctoth wrote:
| > You should prefer a world with credit cards and discount
| brokerages to one which doesn't have them, even as you listen to
| hold music occasionally.
|
| The problem with this is, we've known for 30 years that a system
| that calls you back is better than a system you wait on hold for.
| If they can't even get something this basic right, then I guess
| it's good that banks will eventually, someday be software
| competent, but I'll be long-since dead.
| landedgentry wrote:
| I am not really convinced of Patrick's framing of the
| supposedly inevitable trade-offs. I've lived in other countries
| with credit cards and discount brokerages, and in my opinion,
| the U.S. is uniquely bad at servicing customers.
| janus wrote:
| It depends on where you live. In my country I would never take
| a call from a bank at face value and would always expect they
| give me a phone number to call back, and that better be an
| institutional number. Phone fraud is rampant.
| bluGill wrote:
| Which in turn depends on where you live: some places a call
| is not ended until both sides hang up. Fraudsters use that to
| call you, give you a number and then when you call back
| pretend to be answering the phone (complete with ring
| noises).
|
| If someone like a banks calls you, you need to call back from
| a different phone line, using a number that you look up
| before giving private information.
|
| Note that most of the time the above doesn't matter, as banks
| rarely need to call you to get private information. "did you
| buy X" isn't private - whoever is asking already knows you
| did: even if they are a scammer you have already lost - if
| you didn't you need to hang up and call the bank to arrange
| getting a new account now that your old one is compromised.
| The only other time that matters is why you know who will
| call and why (if you just applied for a mortgage you expect
| the loan officer to call but you also know exactly who that
| is)
| rootusrootus wrote:
| > a system that calls you back is better than a system you wait
| on hold for
|
| But a lot of customers don't actually want that. An established
| connection feels safer than a promise of a future connection
| which may fail to happen for various reasons.
| toomuchtodo wrote:
| There is also no recourse when you never get called back.
| Better to just leave the call on hold until a human appears.
| tomjakubowski wrote:
| What is the recourse if nobody picks up the hold?
| krallja wrote:
| Or, as has happened more times than I can count, someone
| picks up and then the line goes dead?
| bluGill wrote:
| In both those cases you know something happened. If they
| never pick up - at least you know when you gave up. If
| they hang up you know and can restart. Both are bad, but
| better than wondering if you are forgotten.
| RationalDino wrote:
| Patio11 is the best resource that I'm aware of to understand how
| our institutional world works. And its biases. Over and over
| again it is built in a way that incentivizes some behaviors, and
| doesn't incentivize others. One behavior that is always
| incentivized is that the professional and managerial classes
| should always have prioritized access.
|
| This article walks through it in how banks work internally. Much
| more painful is https://www.bitsaboutmoney.com/archive/the-waste-
| stream-of-c..., which shows how rules that supposedly protect
| poor people from abuse, in practice only help those with access
| to the skills of the professional and managerial classes.
|
| I wish there was a way to summarize his point of view and explain
| it to people. Part of the problem is that every system where it
| happens is very complicated. And the complications are exactly
| why you need professional and managerial class skills to get
| priority access.
| orangesite wrote:
| It's absolutely great how @patio11 managed to recreate exactly
| the same system within stripe despite being fully aware of it.
|
| (I save up my karma points precisely so I can burn them on
| comments like this.)
| RationalDino wrote:
| I'm not sure which part you are referring to by "exactly the
| same system", or to what extent patio11 is personally
| responsible for it.
|
| However listen to his explanations of the incentives,
| benefits, and downsides. Then remember that he was working
| within a company that had the exact same incentives (eg same
| regulatory regimes), who was going to be hiring people out of
| the same financial system. And remember that there are parts
| of this that he think really make the world better.
|
| Therefore the expected result really should be, "Somewhat
| better iteration on the basic thing that everyone else does."
| And so it is no surprise that it would include enough of what
| you don't like that you'd see it as "exactly the same
| system".
| e63f67dd-065b wrote:
| My impression of what he wrote is that it's an _explanation_
| of the status quo, not a denunciation of it. In his
| conclusion:
|
| > Although it certainly doesn't feel like it to people who
| hit edge cases, the tiered support model is a technology
| which took us decades to popularize and which made the world
| much better. It brought down the cost of financial services
| and supported product innovation which would have been
| impossible under the mid-century bank staffing model. We
| could not have credit cards or discount brokerages without
| the tiered support model. The biography of Charles Schwab
| makes this point persuasively at considerable length:
| competent telephone operations were instrumental to bringing
| equity ownership to the middle class. You should prefer a
| world with credit cards and discount brokerages to one which
| doesn't have them, even as you listen to hold music
| occasionally
|
| Tiered support is here to stay because tiered support is
| _cheap_ and _resistant to the "unintelligent customer DoS"
| (my words, not his)_. As he points out, you _can_ have
| professional troubleshooters with the capability, authority,
| and expertise to troubleshoot the problem, but their labour
| costs in the hundreds of dollars an hour.
|
| I personally think there is a reasonable model of the world
| where customers explicitly pay a hundred dollar fee to have a
| highest-tier escalation to the office of the CEO/equivalent
| troubleshooting team and have them take a look at your case,
| but this is a model that has not yet been developed or in
| wide use anywhere.
| boilerupnc wrote:
| I've been having a fun ride reading "QualityLand" [0] .
|
| In that world - those who have QualityPoints can exert far
| more escalation force on all parts of their life (change
| the traffic signal now for 10 units) than lower level
| folks. Your comment reminds me of a world where paying fees
| gets you faster and better access. Sadly - Sounds familiar.
|
| [0]https://www.bookbrowse.com/reviews/index.cfm/book_number
| /406...
| Sebguer wrote:
| This sounds like effectively the same premise as
| Doctorow's Down and Out in the Magic Kingdom.
| orliesaurus wrote:
| what he do?
| archon1410 wrote:
| Tangential: the lead picture in the article linked in this
| comment immediately came across as AI generated, whereas the
| one in OP's article did not: I had to go back and look at it
| again to realise that it too is AI generated. It is quite
| complex, similar to the human drawn abstract art one might find
| in an Atlantic or Wired or New Yorker article, the garbled text
| nearly the only thing giving it away. The article in the
| comment is from August 2023, so the difference in quality
| represents only a few months of progress (DALL-E 3?).
|
| Or maybe they're from the same source, and the author just
| chose different aesthetics for the different articles. Quite
| nice, in any case.
| walr000s wrote:
| > which shows how rules that supposedly protect poor people
| from abuse, in practice only help those with access to the
| skills of the professional and managerial classes.
|
| Maybe the world's problems and solutions are inherently too
| complex for someone without those skills to have any hope of
| navigating. Maybe the only real solution is to use Patrick as
| an example for everyone and ask/demand that professionals spend
| some amount of time advocating for people less
| fortunate/educated/knowledgeable than themselves?
| dcminter wrote:
| "No system will ever be able to answer all interesting questions
| about a user; that is formally undecidable in computer science."
| What? Are they talking about the halting problem? This seems like
| a stretch without defining what constitutes "interesting" in a
| very weird way.
| patio11 wrote:
| Please accept this as a handwavy gesture at the halting problem
| for an audience which has on average something like 0.2
| engineering degrees.
| dcminter wrote:
| So what particular banking customer data management software
| do you have in mind that's adversely affected by the halting
| problem? (Edit: Ha, didn't notice you were the author!)
| immibis wrote:
| Hello, Mr Bank Manager, I have enrolled into a game show
| which will cost me half my account balance if it's even,
| otherwise they will triple it and add one...
| bob1029 wrote:
| > Due to the deskilling of the bank branch, the people at a bank
| branch, including the branch manager in many firms, can only
| offer solutions to relatively straightforward problems. For the
| other ones, they also have to call into a support phone tree.
| Sometimes the bank will have ability to e.g. share context
| between their screen and the Tier 2 rep; sometimes they're
| literally incapable of proving to the bank that they work there.
|
| This is essentially the central value proposition of our SaaS
| product - Providing less-skilled employees the ability to
| accurately conduct complex account and customer management
| activities in the branch environment. An "on-rails" style
| application experience that more-or-less forces you to take legal
| actions with the end customer.
|
| Our most popular workflows from the perspective of bankers are
| the ones used most rarely - IRA rollovers, conversions, etc. The
| ones you cannot possibly hope to memorize because they happen so
| rarely. But, from a board room perspective, the focus is much
| stronger on the efficiency/correctness gains for the happy-path
| consumer product stacks.
|
| I'd say it's a dragon of a space. Borderline cursed. It took us
| half a decade just to get core interfaces working well enough and
| that is only like 20% of the puzzle. Documentation, regulations,
| back office processes, etc are way more important and involve
| super nasty conversations with people who might sense that you
| are trying to replace them.
| lainga wrote:
| I found the article answered most of the questions it posed, but
| this one came and went unexplained...
|
| > Banks aggressively partition staff based on job duties and
| levels within those duties.
|
| Why?
| orangesite wrote:
| Efficiency fallacy.
|
| "We can generate more throughput in the system as a whole by
| negatively incentivizing each component to work itself to
| death."
|
| See Goldratt, Eli.
| adolph wrote:
| One phrase that comes up is "segregation of duties" meaning
| things like "if one person can do X and Y then they can commit
| fraud without being caught." So the principle of "segregation
| of duties" means that the people who can do X are on different
| teams than those who can do Y.
| immibis wrote:
| It doesn't only happen at banks, though.
| NovemberWhiskey wrote:
| Like, specifically: please don't let your operations people
| in books and records have access to your treasury and
| reconciliation systems. Or, don't let front-office people
| have access to middle-office systems. See: Leeson, Nick;
| Kerviel, Jerome.
| aidenn0 wrote:
| > I watched senior engineering leadership ask senior Ops
| leadership why they had never been asked to fix them. Ops replied
| that their long experience in the financial industry had taught
| them that Ops never gets to use software which isn't broken and
| that complaining about this is like complaining about gravity.
|
| I see this _everywhere_ not just at banks. A common workflow is
| horribly broken with dozens of habitual workarounds and the
| developer could fix it in a day if they knew about the issue. I
| even see it between engineering teams when there are cross-team
| dependencies. It is really hard to train people to not put up
| with chronic pain in their workflows!
| MichaelZuo wrote:
| A lot of the times, the 'correct' workflow isn't even
| documented enough to recreate it.
|
| Often not even enough to identify that there ever was one in
| the first place.
| pixl97 wrote:
| I work with banks on, um issues, without disclosing too much.
| Occasionally we find issues with their software workflows, and
| this isn't related directly to monetary stuff. We're not
| allowed to have the end result change in any way most of the
| time. "But we're getting a wrong answer", or "This is costing
| XX person hours per day" isn't up for consideration. Nothing
| must change.
|
| Ugh, and on the subject of banks computer operations. Every
| single department is in deep blame avoidance mode. It's not
| "find and identify problems" mode, it's "It wasn't me" mode. We
| had our application performance drop to almost zero (like we
| dropped to disk operations per minute IOPM) I spent hours
| telling the customer, this is your infrastructure. So we got
| infrastructure teams on the call trying to figure out where it
| was. Not a single one of them were helpful "Everything fine,
| it's not us" was the first thing out of their mouths and the
| second was "We didn't change anything".
|
| It took 10 hours of sitting on a call over 2 days to get the
| NAS team to admit they turned on anti-virus on the NAS side and
| that the machines were in meltdown mode because the CPU was off
| the charts. The preceding people didn't even look at the
| metrics before coming back with a "it's not my problem,
| everything is fine" response.
| rkagerer wrote:
| Encountered a challenge like this once. Infrastructure team
| kept telling us it wasn't anything on their end. I
| coordinated with the business unit VP to serve their entire
| QA environment from four VM's on my laptop for a day, and
| performance went from slow as molasses, to purring like a
| kitten. A couple days later their infrastructure team finally
| identified storage latency issues on their multi-million
| dollar cluster and let me help them fix it.
| pixl97 wrote:
| I swear IOPS/request latency is one of the least understood
| things in these huge companies. "But we have 40bazillion GB
| and 100GB LAN", cool story bro, your disk queue latency is
| pegged at your depth limit and your fs response latency is
| over a second, everything is going to suck till you deal
| with that.
| RajT88 wrote:
| I have had customers say this when not getting desired
| throughput cross-continent. "But the pipes! They are
| fat!" Yes but also your window needs to scale... 6 figure
| network engineers not knowing about window scaling, who
| do not know how to analyze a packet trace.
|
| I recently had someone suggest that they needed 1ms
| latency cross-continent. I explained patiently that the
| laws of physics have to change for them to hit that
| number.
|
| I am not even a network engineer!
| NovemberWhiskey wrote:
| Truth. I literally have a signal on one of my monitoring
| dashboards which indicates "database is currently
| undergoing online backup", because it is the single most
| important performance signal I have. This doesn't come to
| me as a signal from the database team; I have to poll the
| database for it myself.
|
| Noisy neighbor in inadequately-isolated, shared-tenancy
| models is just the worst.
| broast wrote:
| I find it very hard to tolerate teams that say an issue
| isn't on them if they aren't pointing to evidence that
| indicates where they think the issue is. If you think it's
| not on you but it affects something within your
| responsibility, you're still on the hook until you prove
| it.
| Scoundreller wrote:
| Nothing more fun than troubleshooting a fax machine
| incompatibility.
|
| "It's you, we're receiving faxes from everyone else"
|
| "It's you, everyone else is receiving our faxes"
| aidenn0 wrote:
| > I work with banks on, um issues, without disclosing too
| much. Occasionally we find issues with their software
| workflows, and this isn't related directly to monetary stuff.
| We're not allowed to have the end result change in any way
| most of the time.
|
| I think this is a good constraint in general for banks to
| have, and its definitely _harder_ to change a workflow under
| these constraints.
|
| > Every single department is in deep blame avoidance mode.
| It's not "find and identify problems" mode, it's "It wasn't
| me" mode.
|
| This tends to happen in large organizations, and is
| incredibly toxic to productivity. The most extreme form is
| when you get fired (or otherwise censured) for fixing
| something because "You were in charge of the thing that was
| causing all this trouble?!"
| madeofpalk wrote:
| A while back I worked at a digital media company. For
| developers, the process of setting up ads for new mini sites
| was a big pain and required lots of back and forth and
| approvals with Ads team. I asked other developers, and they say
| "This is just the process that tyhe Ads team needs".
|
| I go talk to the Ads people about this specifically and they
| say "yeah it's a pain, but this is the way the developers need
| it".
|
| Turns out _both_ parties had been wanting a better way which
| was pretty easy (3 different page /ad placement templates), but
| neither had bothered to express this to each other.
| quercusa wrote:
| I moved to a role supporting a team that had been told that
| huge numbers of things were "impossible" by a brilliant guy
| given to migraines. If you asked him on a good day, he could do
| anything. But on a bad day he just wanted you out of his
| office. By his demonstrated competence, they took what he said
| as gospel.
|
| I spent an hour or two a week dragging "impossible" things out
| of them and fixing them. They were very happy and ascribed
| wizard-level powers to me.
| rco8786 wrote:
| On a previous team every eng would shadow and Ops person for a
| day, once a year. We fixed so much stuff.
| Terr_ wrote:
| It sounds like the psychology of "Learned Helplessness" [0]
| among employees and teams.
|
| [0] https://en.wikipedia.org/wiki/Learned_helplessness
| supportengineer wrote:
| Don't get me started. I've seen many cases where one PHP page
| doing one occasional SQL query against one prod database, could
| drive massive efficiency improvements in the organization. In a
| minority of these cases, I was allowed to do such a thing.
| kylehotchkiss wrote:
| My very very naive take on this: why don't banks have more common
| operating systems and data structures? Why is it this hard for
| acquisitions to work? They're a guaranteed part of business so a
| common software stack could help Chase integrate First Republic
| without two parallel systems? (I welcome any responses on why
| this will never happen though!)
| patio11 wrote:
| There is a famous joke about standards: the great thing about
| common standards is that you have so many to choose from. A
| corollary to it: if none of the existing common standards meets
| your need, how about letting some of your senior staff get
| promoted by successfully creating and popularizing a new common
| standard?
| mrkeen wrote:
| Every problem you solve takes time away from solving other
| problems, and this one is a particularly difficult coordination
| problem with very little payoff.
|
| You might be imagining two banks coordinating together, now
| scrap that and imagine ALL banks coordinating, because you
| don't know which two are going to merge.
|
| Banks have been born at different times (think centuries - or
| even millenia). So they'd all have to move in lockstep from
| clay tablets to papyrus to printing press to typewriter before
| they even decide whether or not they want to bet on computers
| as a way forward.
|
| To some degree banks already have 'a shared operating system'
| in the form of clearing houses and central banks. I don't know
| enough about that stuff. But it's the reason why bank transfers
| have mostly taken days to complete, rather than seconds, in the
| past few decades.
|
| Come to think of it, there's a huge incentive not to stay in
| lockstep with all the other banks if you can offer customers
| instantaneous transfers when other banks make you wait for
| days.
| CamouflagedKiwi wrote:
| Why don't software companies have more common operating systems
| and data structures? Why is it hard for acquisitions of
| software companies to work? They are a common part of business
| in that industry too.
| rdtsc wrote:
| > at some financial institutions, you can get a SAR filed for
| knowing what a SAR is, because "advanced knowledge of anti-
| moneylaundering procedure" is a characteristic only of financial
| professionals and terrorists.
|
| That is messed up. You ask about a SAR or indicate you know about
| them in general, you get a SAR slapped on you, and they close
| your account. You're one of hundreds of thousands, why bother
| handling a SAR-ed user when they can just move on without you.
|
| Are individuals allowed to have a public forum to discuss and
| share notes of what they did in their account to learn and
| prevent this from happening in the future? It seems in a lot of
| cases it's using these payment systems like Zelle or have
| anything associated with phrases resembling black-listed
| countries or organization.
| RationalDino wrote:
| Yes, individuals are allowed to have a public forum for that.
| We have freedom of speech after all.
|
| However such a forum is going to be of particular interest for
| would-be money launderers. And therefore you should expect it
| to be monitored by people connected to the financial system.
| With the result being that active participation in such a forum
| may itself become grounds for a SAR to be slapped on you.
|
| A SAR that, of course, you will never be informed of. Because,
| as patio11 documents, that is the law.
| AmericanChopper wrote:
| Anti-Money Laundering laws are a complete anti-democratic
| tyranny. With AML you are assumed guilty anytime you possess
| money, or participate in any financial transactions, or have
| any assets. If called upon to do so you will have to prove
| your innocence beyond a reasonable doubt, and if you fail to
| do so, your assets or money can be permanently seized. All of
| this occurs without any form of due process.
|
| The government actually wouldn't be able to make these
| regulations for itself, and the only way it manages to make
| AML laws work is with a complete governance anti-pattern.
| Where they simply tell the banks that if they unknowingly
| allow any "money laundering", then they will be punished,
| rather than actually creating some regulations for them to
| follow. So the institutions just create these kafkaesque
| nightmares themselves, because they don't really care about
| who gets screwed over by them.
|
| The worse part is that money laundering is trivially easy for
| anybody who wants to do it, it just costs money to do the
| compliance properly. The only people who get thwarted by
| these laws are immigrants who do a lot of remittance, and
| law-abiding wealthy people who naively think they're entitled
| to possess their own money. Two groups that society generally
| doesn't care at all about protecting.
|
| I personally make a lot of money off the AML compliance
| industry, so I'm not really complaining for my own sake. But
| these laws are the intended outcome of "anti-terrorism" and
| "anti-tax-evasion" policies.
| lawlessone wrote:
| >and law-abiding wealthy people who naively think they're
| entitled to possess their own money.
|
| They should be fine as long as they show receipts.
| AmericanChopper wrote:
| I really hope this is a joke lol. The amount of paperwork
| required today is far in excess of anything required pre-
| GFC. Basically any wealth acquired prior to then is up
| for confiscation, and this happens all the time. But
| again, nobody cares, because injustices delivered upon
| the rich are fine. Imagine you inherited a property from
| your parents, how do you imagine you'd be able to prove
| the provenance of that asset? Or the cash used to buy
| it/pay the mortgage on it? You can't.
| ls612 wrote:
| >Imagine you inherited a property from your parents, how
| do you imagine you'd be able to prove the provenance of
| that asset? Or the cash used to buy it/pay the mortgage
| on it? You can't.
|
| Do you have an example of what you mean by this? Like
| they will say "well you don't have your old paper pay
| stubs from the 1990s when you were paying the mortgage on
| your house so we will confiscate your house, go die alone
| in the gutter"? Because I find that hard to believe. Most
| people with wealth have an obvious reason for that wealth
| which is documented in the formal bureaucratic system.
| AmericanChopper wrote:
| > well you don't have your old paper pay stubs from the
| 1990s when you were paying the mortgage on your house so
| we will confiscate your house
|
| Yes this is basically how it works. The only contrived
| thing about my example is that we're talking about one
| house a person inherited, rather than millions of dollars
| in assets.
|
| Here's a well documented example of this happening in
| real life
|
| https://www.latimes.com/california/story/2022-09-30/judge
| -ba...
|
| > A federal judge ruled Friday that the FBI's seizure of
| tens of millions of dollars in cash and valuables from
| 700 safe-deposit boxes in Beverly Hills did not violate
| anyone's constitutional rights.
|
| > The decision by U.S. District Judge R. Gary Klausner
| endorsed law-enforcement tactics that tested the limits
| of how aggressive federal agents can be in seizing money
| and property in the absence of any evidence that the
| owner committed a crime.
|
| > The ruling did not address some of the most
| controversial aspects of the raid, such as the FBI's
| attempt to confiscate assets from box holders on the
| presumption they were criminals, even in cases where
| agents had no evidence to validate their suspicions.
|
| Of course, nobody cares, because those people are rich,
| so they probably didn't deserve that money anyway...
| eschneider wrote:
| If you inherited it (at least in the US) there will be
| probate records. And property transfer records. There's
| LOTS of documentation for that sort of thing.
| AmericanChopper wrote:
| Records that you inherited it are not enough. Where are
| the records that your parents acquired it properly? Where
| are the records that prove the money they used to acquire
| the house were acquired properly? This is the trouble
| with a presumption of guilt, proving these things are
| basically impossible.
| eschneider wrote:
| No. Probate records that you inherited it are enough to
| get property transferred to your name and the title
| recorded as such. If you want to be covered just in case
| your parents somehow stole the land and falsified their
| ownership, title insurance is a thing.
|
| None of this is impossible. None of this is unknowable.
| This all happens everyday.
| AnthonyMouse wrote:
| The problem (this time) isn't that they try to deny your
| title to the property, it's that you sell the property
| and they freeze your account with the money in it and now
| the burden is on you to prove that your parents acquired
| it lawfully, which you have no way to do because it
| happened many years ago and your parents have passed
| away.
| eschneider wrote:
| No. If you have title, it's presumed that the land has
| been lawfully transferred. If someone/.gov wants to claim
| otherwise, they need to prove that. The entire mortgage
| market is predicated on that. Can someone cite an
| instance where someone who "inherited property had to
| prove their parents acquired it legally because their
| funds were frozen after a sale" because I'd be very
| interested in seeing that. I'd be a LOT more willing to
| believe that a sale fell through because the BUYERS
| couldn't verify the parent's title, but that's not what's
| described here.
|
| Do buyers here not do a title exam?
| pdonis wrote:
| _> Anti-Money Laundering laws are a complete anti-
| democratic tyranny._
|
| But they were produced through the democratic process: we
| have told our elected representatives that we want them to
| Do Something about things like organized crime and
| international terrorism, and these laws are part of the
| Something That Was Done. The laws will not change unless
| and until we the people change the incentives we give our
| elected representatives.
| ElFitz wrote:
| Wether or not laws and policies have, in practice,
| anything to do with what people want, is still up for
| debate [1] [2].
|
| It could also be argued that such laws and policies have
| mainly been enacted by states in order to eliminate
| threats to their authority, legitimacy, or continued
| existence, through financial control.
|
| Which may or may not be the case. Just pointing out that
| states, even liberal democracies, may not always be all
| about expressing the will of their constituents.
|
| [1]:
| https://www.cambridge.org/core/journals/perspectives-on-
| poli...
|
| [2]: https://www.vox.com/2016/5/9/11502464/gilens-page-
| oligarchy-...
| pdonis wrote:
| _> Wether or not laws and policies have, in practice,
| anything to do with what people want, is still up for
| debate_
|
| If we the people wanted something different, we would be
| voting differently. The fact that we continue to vote for
| the same incumbents means they are doing what we want.
| lcnPylGDnU4H9OF wrote:
| Individual House Representatives usually have high
| approval ratings from people who voted them in while
| Congress as a whole has a terrible approval rating. It's
| not quite as simple as seeing historical election results
| and saying everybody is necessarily happy with their
| representation.
| pdonis wrote:
| _> Individual House Representatives usually have high
| approval ratings from people who voted them in while
| Congress as a whole has a terrible approval rating._
|
| Yes, that's true. (And the Senate is no different.) What
| does it mean?
|
| I think it means that people do not realize the actual
| problem. They don't see the two facts you cite as at odds
| with each other or connected to each other at all. But
| they are. The _reason_ why Congress can have such a low
| approval rating while incumbency reelection rates remain
| high are that people think it 's all those _other_
| members of Congress who are the problem--if only everyone
| would listen to _their_ members of Congress, all that
| stuff would get fixed. They don 't realize that, if you
| send someone to Congress to fix something, and it doesn't
| get fixed, you need to _send someone else_. You can 't
| keep allowing the incumbents to hide behind "it's not me,
| it's all those others" forever.
| immibis wrote:
| There's no evidence that representatives do what
| constituents want them to do. In fact, there's evidence
| they do what billionaires want them to do.
| pdonis wrote:
| _> There 's no evidence that representatives do what
| constituents want them to do._
|
| Sure there is. "Want them to do" means the constituents
| decide their votes based on Something Being Done. The
| fact that we the people continue to vote in our incumbent
| representatives at rates over 90 percent is a direct
| measure of the extent to which those representatives are
| doing what we want them to do.
| immibis wrote:
| Mostly we vote based on our personal biggest issue, no
| matter what they do on the other issues. A lot of
| Republicans vote Republican because they claim to hate
| abortion, and they literally don't care about the rest.
| AnthonyMouse wrote:
| > The fact that we the people continue to vote in our
| incumbent representatives at rates over 90 percent is a
| direct measure of the extent to which those
| representatives are doing what we want them to do.
|
| This is an artifact of the districting system. A given
| district wants the local military base to stay open, or
| tax credits for the local industry. Their representative
| gets them that, so they get reelected. To get them that
| they screw over the general public in a thousand ways --
| mostly by trading other representatives for the things
| that aren't in the public interest but _their_ districts
| want -- but none of them are big enough for the people in
| the district to change their vote, and most of them
| couldn 't have been prevented by a single representative
| anyway. So the bums fail to get voted out.
| pdonis wrote:
| _> This is an artifact of the districting system._
|
| Which in no way contradicts what I said. The fact that
| what the people want (or at least a voting majority of
| us) actually screws over the general public does not mean
| the people don't want it. It just means that what the
| people want is not actually good for all of us in the
| long run. Welcome to reality.
| RationalDino wrote:
| No, that doesn't measure that they are doing what we want
| them to do. That measures how effectively they can
| convince us that the other candidate would be worse, so
| you should vote for the lesser evil.
|
| On most topics, there is NO candidate who is for doing
| things outside of the current Overton window. If, for
| example, you don't like our AML laws, you probably don't
| have a viable candidate on the ballot who wants to change
| our AML laws. Therefore your vote can't show your support
| for changing AML laws.
| dragonwriter wrote:
| > On most topics, there is NO candidate who is for doing
| things outside of the current Overton window.
|
| Sure there is.
|
| They aren't _likely_ to be a major party candidate, but
| then, that 's pretty much true by the definition of the
| Overton window -- if it is supported enough to be a
| tolerable position for a major party candidate that isn't
| an extreme outlier within the party, then it is _not_
| outside the range of acceptability than the Overton
| Window refers to.
|
| (Of course, the major point of the Overton Window is
| that, in a system with elected lawmakers, _laws largely
| aren 't set by lawmakers preferences_, but by forces,
| largely external to lawmakers -- including both
| concentrated interest groups and grassroots activists --
| that _shift_ the Overton Window and set the bounds for
| what it is practical for lawmakers to support.)
| pdonis wrote:
| _> that doesn 't measure that they are doing what we want
| them to do. That measures how effectively they can
| convince us that the other candidate would be worse_
|
| If we are convinced, then they _are_ doing what we want
| them to do--because they convinced us that there is no
| point in wanting anything else.
|
| _> On most topics, there is NO candidate who is for
| doing things outside of the current Overton window._
|
| Yes, but what is the Overton window? It's the range of
| policies that _most people will accept_. So by definition
| only policies within the Overton window can possibly be
| what the people (or at least a majority of us) want.
| peyton wrote:
| Nonsense. It's entirely possible for tyrannical laws to
| become self-sustaining by applying them for political
| purposes.
| novok wrote:
| IMO AML should be abolished because it is ineffective,
| inefficient and nothing would effectively change if removed.
| It recovers 100x less than its compliance cost. It's the TSA
| of banking, it's motion without progress.
|
| https://content.11fs.com/article/aml-is-the-worlds-most-
| inef...
| RationalDino wrote:
| The question isn't how much crime it catches. It is how
| much crime it prevents in the first place.
|
| (No, I'm not suggesting that I have an answer to that
| question. Just that you're measuring by the wrong measuring
| stick.)
| AnthonyMouse wrote:
| How much crime it catches is directly related to how much
| crime it could prevent. If the measure is totally
| ineffective and criminals hardly ever get caught then
| there is no deterrent.
| margalabargala wrote:
| The absolute magnitude of crime it catches is completely
| irrelevant. The earlier poster is incorrect saying is
| useless because
|
| > It recovers 100x less than its compliance cost.
|
| The proportion of crime that it catches is of interest to
| criminals and is what will have the deterrence effect,
| but whether it catches 10% or 90% is difficult to know as
| a layperson.
| spicymapotofu wrote:
| This is clearly not true. Why else do organizations
| involved in large scale ML move to locations with more
| lax AML regimes? E.g. crypto in eastern Europe. If the
| risk of being caught was no deterrent, ML activity would
| be dependent on 'amount of launderable funds' and
| independent of AML regime - can you offer an argument
| showing this is true?
| RationalDino wrote:
| It really isn't so simple. My views on this are informed
| by https://www.bitsaboutmoney.com/archive/money-
| laundering-and-..., so you might want to read that.
|
| First, there are widely known techniques to beat AML.
| Criminals use them. Using them imposes costs. So you can
| reduce the profitability of crime, and therefore its
| frequency, without catching much crime directly.
|
| Secondly, one of the goals of AML regulations is to make
| it easy to construct a money laundering case against a
| criminal caught another way. This is kind of like putting
| Al Capone in jail for tax evasion. Tax evasion isn't why
| you want him in jail, it is just the thing you can
| convict him of. Prosecutors see value in these easy
| convictions.
|
| Are they worthwhile? That's above my paygrade. Certainly
| patio11 makes a case that they might not be. But both of
| the things that I just mentioned show that the rules are
| valued for reasons other than routinely catching a lot of
| crime.
| Scoundreller wrote:
| Thing is, if you're laundering money, you're probably
| doing something incredibly profitable (importing kilos of
| something that cost you $2k and then selling for $20k, or
| just straight up stolen funds with no cost basis).
|
| These groups have no issue with the few percent cost of
| added transaction friction.
|
| But it really costs people running low-margin businesses
| or unsophisticated honest people just trying to move
| overseas, remit funds to family or buy a home overseas.
|
| And the knock-on effects of the bypasses becoming things
| like "buy a front-business and care less about the
| legitimate competitors that can't compete with someone
| unworried about profit" or "buy a house and let it sit
| empty".
| immibis wrote:
| > We have freedom of speech after all.
|
| You don't, though.
| PrimeMcFly wrote:
| The US does. Most countries don't.
| hef19898 wrote:
| All democracies do, one way or the other.
| Scoundreller wrote:
| Plenty of democracies with weak or highly overridable
| constitutions.
|
| Most of Canada's is like that. Basically governments can
| suspend all of your "fundamental freedoms" for 5 year
| periods, renewed as often as they like.
| ruszki wrote:
| Freedom of speech almost never meant and never will mean to
| be able to speak whatever you want to whoever you want
| wherever you want whenever you want. No matter what
| propaganda tells. There are limits and will be limits, and
| except anarchists nobody can say that this is what they
| really want in good faith. We know as a fact that
| uncontrolled free speech is harmful.
|
| Currently, almost everybody who say this, want something
| else, and this is just a tool to achieve that other thing.
| A proven harmful tool.
|
| There is free speech in the USA.
| matheusmoreira wrote:
| I think it's pretty clear by now that "anti money laundering"
| is just the financial arm of warrantless global mass
| surveillance. Money laundering may be a crime but it does not
| justify this. "Monitoring" people and punishing them because
| they "might" be some money launderer or terrorist is
| completely backwards and should be a violation of basic
| rights.
| tlb wrote:
| People are massively dishonest about this, though. Like there
| are occasional Ask HN posts where someone is outraged that
| their bank/payment account was closed for "no reason", but
| eventually it comes out that they're in North Korea selling
| cannabis to Iran or something.
|
| But it does seem like the world lacks a manual on How Not To
| Get In Trouble With Your Bank. "Structuring" in particular is
| something someone might innocently do just because they like
| round numbers.
| mminer237 wrote:
| CTRs are required for $10,000+. Structuring is more like if
| you're depositing $9,999, which is kind of the opposite of a
| round number.
| idontpost wrote:
| It would also be two deposits of $5k or 10 $1k deposits,
| etc.
| AmericanChopper wrote:
| The only way to get any assurance about staying out of
| trouble with your bank is to have enough money that they
| start to not care so much about the risk of doing business
| with you, and to pay a lot of money to an expert to do the
| AML compliance for you.
| opportune wrote:
| Completely agree that banks should provide prescriptive
| guides.
|
| IME they really don't like when you work around their eg
| 50k/day ACH transfer limit by initiating 50k ACH transfers on
| 4 consecutive days to move an account of 200k. But they don't
| tell you what they actually want you to do if you want to
| move 200k - and for obvious reasons they probably don't want
| to make these transfers fully frictionless. They just assume
| you'll know to show up at a branch in person or get on a
| phone to ask about it and treat you like a criminal if you
| don't.
| dmurray wrote:
| Is that even "working around" the restriction? Surely
| moving 50k on each of 4 days is what you're expected to do
| in that case. It still means the maximum a fraudster can
| get away with is 50k if the fraud is discovered in one day.
|
| My last bank had limits like 20k/day and 50k/week, so it
| seems like yours could have 50k/day and 60k/week if they
| "really don't like" you using it like this.
| patmcc wrote:
| No, you're expected to call and set up an appointment
| with a banker who can sell you on some kind of business
| account that has appropriate services for moving money in
| that way.
|
| And yes, this will cost more and take more time than the
| spreading-it-out method.
| alright2565 wrote:
| no, this is too cynical. just give them a call,
| authenticate yourself, and they'll happily raise the
| limit for you.
|
| maybe if you're moving 50k/week they'll try and get you
| on a business account, but at that point you're already
| not using the account for the purposed you claimed when
| you opened the account.
| opportune wrote:
| One of the reasons banks have these restrictions (besides
| the obvious thing of making it difficult to take large
| sums of money out because it hurts their business) is to
| prevent fraud. They want to prevent the case where some
| criminal gets physical access to my computer, or my login
| credentials, and drains my account without my knowledge.
| So they want you to initiate a manual verification that
| you really do intend to move such a large sum to prevent
| that fraud.
|
| If you do what I did, you usually get a temporary hold on
| your account and some very skeptical bank employee
| calling you to grill you on what you're doing.
|
| On one hand I get it. For every story like mine, where
| this is just a temporary frustrating inconvenience,
| there's probably a story where grandma lost her life
| savings after talking to the nice man from Microsoft on
| the phone. But also they don't make it clear at all what
| you are supposed to do as non-criminal to work around
| their restrictions, which is just bad for customers.
| sidewndr46 wrote:
| working around a restriction is called "Structuring" in
| the US:
|
| https://en.wikipedia.org/wiki/Structuring
| dmurray wrote:
| This is not true. Structuring is much more narrowly
| defined, including in that Wikipedia article. It requires
| you to be working around a legal or regulatory
| _reporting_ requirement.
| xeckr wrote:
| Banks have an incentive to create as many roadblocks as
| possible to prevent you from transferring out large sums of
| money.
| dan-robertson wrote:
| In particular in the US, they are on the hook for almost
| all of it if the money was fraudulently moved out.
| quartz wrote:
| Couldn't you just send a wire?
| opportune wrote:
| Yes, but that involves talking to someone and waiting on
| hold. If there's no rush, doing 4x ACH is easier, if you
| don't know it'll get you flagged. All I'm saying is banks
| need to be more prescriptive about telling you "we'll put
| a hold on your account if you move large sums without
| telling us" rather than giving you some fake limit that
| actually utilizing will raise red flags. This is a common
| failure mode
| callalex wrote:
| Those typically have huge fees.
| gosub100 wrote:
| $25 to move $50k in an atomic, irreversible way isn't a
| huge fee IMO. when you're dealing with that amount of
| money, the risk of it getting frozen or flagged for fraud
| is > $25. A lot of banks will let you send wires for free
| if you have a large enough balance.
| ska wrote:
| Not int the context of these amounts.
|
| $20-ish to move 200k safely is nothing. If you are doing
| it internationally, it's typically tiny compared to the
| FX cost.
| Scoundreller wrote:
| I'd be happier keeping the $25 tyvm.
| hef19898 wrote:
| And risk getting your account frozen "for no reason",
| really smart.
| ska wrote:
| Sure, write a personal check then and expect a lengthy
| hold. Or something else on the risk vs. PITA vs. cost
| framework.
|
| Point is, wires are cheap for what they do. They aren't
| your only option, but all options have tradeoffs.
| nick222226 wrote:
| You do a wire transfer.
| opportune wrote:
| Yes, my point is that banks don't make it clear that
| maxing out their ACH quotas will get your account frozen
| and that you _should_ do a wire transfer. You shouldn't
| have to learn this the hard way by getting your account
| frozen (which is very stressful when it happens to you
| for the first time), and banks should make it clear what
| you should do, which is my point
| ska wrote:
| It's a pretty niche problem though, so I guess not
| surprising they aren't great about communicating it (it
| probably was communicated, on page 30 of your agreement
| in small confusing text).
| hef19898 wrote:
| There are some systems, banking for example, where
| "hacking" them and trying to be smarter than others can,
| and actually does, backfire.
| boilerupnc wrote:
| Funny enough. Whenever possible, I round all my tips to cause
| the total to generate a particular two digit cents amount -
| so that I can easily detect fraud when I scan my statements.
| It's my low tech error code check.
| velcrovan wrote:
| Has this ever turned up anything suspicious?
| eadler wrote:
| I track almost all of my expenditures. At a restaurant I
| used to visit fairly regularly I noticed that my costs
| were often off by approximately +-25 cents. This was
| inconsistent and not always in one party's favour. Upon
| reporting and investigation it turned out that (a) I
| routinely wrote 'math' along with a total instead of a
| tip and (b) one of the waiters only approximated the math
| required.
|
| Nothing nefarious and I'm not even sure if I won or lost
| out of this - but it was interesting to catch.
| pdntspa wrote:
| > I routinely wrote 'math'
|
| Why would you do this?
| topherclay wrote:
| I had to reread this because it didn't make sense to me
| the first time because it's so insane.
| ska wrote:
| Not surprising, right? I don't know what you expected
| implicitly asking them to do the arithmetic for you, but
| I would've assumed not much care would be taken.
| PKop wrote:
| Catch what? Why would you do something so silly
| boilerupnc wrote:
| It actually did. At a wings place I noticed a total that
| wasn't my usual last two digits. I called up the place
| and they confirmed they had an employee who had been
| altering tip amounts and also skimming cards. They
| advised me to call my credit card company and ask for a
| new card. It is now a well defined muscle memory for me.
| Therefore for very little effort I get a desirable side
| effect of easy detection. My teen son currently rolls his
| eyes when I fill out the receipt but I suspect he'll
| adopt the habit in some form over time.
| bravura wrote:
| What about routine credit card transactions that you
| don't tip on? Isn't that the bulk of purchases ?
| jdadj wrote:
| I use palindromes. Easy to check and will catch extra
| dollars added.
| aembleton wrote:
| I get a notification on my phone when any money is
| deposited or withdrawn from my account. If its not
| something I've just done or an unexpected amount, then its
| probably fraud and I can tell my bank.
| zoeysmithe wrote:
| This is a little victim blamey. Banks mess up all the time.
| Regressive policies in capitalist institutions are extremely
| common. Incompetence is common. Negative action in service of
| the profit incentive is common.
|
| There's no shortage of people who found their accounts closed
| for "fraud" who did nothing wrong, but instead were
| victimized by the algo and the general incompetence of
| banking tech.
|
| Personal financial experts often tell people to carry a
| credit card from a bank that isn't yours or have a checking
| account at a separate bank because this is so common.
|
| Lastly, the people moving money to blacklisted places aren't
| opening Bank of America checking accounts. There's entire
| cottage industries and crypto and shady international banks,
| etc ready to cater to them. They're not getting banned
| because they use services that don't ban them for moving
| money around like this. But everyday working class people get
| banned randomly for moving gifts or tuition money around,
| etc.
| AussieWog93 wrote:
| Anecdata, but I've had both my bank account and Stripe
| account closed for basically "no reason".
|
| I still don't know why Stripe closed my account (I was
| selling cheap USB oscilloscopes online, never had a
| complaint. Couldn't get in contact with them at all when it
| happened.)
|
| My bank account was closed because I filled in a KYC form
| incorrectly, and they didn't have a process in place to
| follow up properly when this had occurred.
| ponector wrote:
| Bank closed it because you lied in KYC form. And you lied
| again in your comment that they closed for no reason.
| izacus wrote:
| Making an honest mistake on a complex form isn't "lying"
| and neither is it an offense that warrants financial
| punishment. What the heck?
| ponector wrote:
| How about seeing like a bank? From bank's point of view
| it could be either honest mistake or deliberate lie. And
| if person is lying and have been caught - they always say
| it was an honest mistake.
| stouset wrote:
| I've also heard repeatedly in conversation people frequently
| admit to structuring financial transactions for a variety of
| reasons, completely unaware that doing so is a felony.
| immibis wrote:
| Is it illegal to round up your transaction to $10,001 for
| the purpose of making the bank file the form so you can't
| be accused of structuring to avoid it?
| PrimeMcFly wrote:
| lol, no. Why would it be?
| sicromoft wrote:
| It's only illegal if you're intentionally doing it to avoid
| reporting
| stouset wrote:
| They _are_ intentionally doing it because of mostly
| imagined consequences of having the transactions be
| reported. And committing a felony as a consequence.
| teemur wrote:
| Sorry, what does "structuring financial transactions" mean
| in this context?
| sidewndr46 wrote:
| https://en.wikipedia.org/wiki/Structuring
| zb1plus wrote:
| What can be done as an ordinary people to abolish this system?
| I firmly believe these types of systems are gross violations of
| the 1st amendment
| jgilias wrote:
| As the Nobel laureate, economist F.A. Hayek said in 1984 -
| take the money out of the hands of the government using some
| sly or roundabout way.
| matheusmoreira wrote:
| Cryptocurrency and self-custody. Monero seems like the best
| option.
| rnk wrote:
| When I worked at google they made all the devs in my team take
| the anti-money-laundering class. It was pretty basic stuff like
| "don't carry a suitcase full of cash across international
| boundaries". I remember everyone was amazed that I passed the
| test. And it must have been suspicious ;-)
| ypzhang2 wrote:
| Effectively, its all just based on what indicators have a
| sufficient signal-to-noise ratio. If the signal-to-noise is
| high enough for any detectable behavior, then it can become a
| SAR.
|
| You can absolutely have a public forum to share tips on how to
| stop this from happening. Just know that said public forum will
| be mined by money launderers and fraudsters and whatever work
| around is posted will most likely fail to work within months.
|
| You have to imagine that the banking system exists in an
| adversarial environment with money-launderers and fraudsters.
| And instead of code that will always do whats written, the
| interface is a squishy human for a majority of these
| interactions.
| lozenge wrote:
| If you know about SAR, you know that banks can't share
| information about them or their criteria with the account
| holder. So the only reason to mention it is if you are angling
| to bribe an employee to break the rules.
| jampekka wrote:
| I'd wager the reason a lot of bank systems suck is that them
| sucking doesn't matter to the banks, and the suck can be even
| beneficial to them.
|
| It's rather difficult to change one's bank, and banks actually
| put up hurdles to make the change difficult. E.g. moving loans
| can have huge "rearrangement fees", loan guarantees may be almost
| impossible to transfer and the bank account info is in quite a
| few places and having it wrong can cause missed payments.
|
| A good example is that when it was proposed that one should be
| able to transfer their account number to another bank (as
| telecoms have to do for phone numbers here in Finland at least),
| the bank lobbyists said this is technically impossible, which is
| of course ridiculous. And that we still this day and age have to
| wait for days for a bank transfer to clear.
|
| There are some new banks (e.g. Monzo) that once you use them, it
| really shows that most banks just suck.
|
| When you have literally a license to create money out of thin
| air, you can be really incompetent (except in lobbying of course)
| and still make hand over fist.
| mrkeen wrote:
| > When you have literally a license to create money out of thin
| air
|
| Well, you can loan out some amount of money that you don't
| have, hopefully get it returned to you with some interest.
| jampekka wrote:
| If enough doesn't get returned, the gov/centeral bank gives
| it to you as a bailout. And for many loans you automatically
| get it from the gov if the debtor can't pay.
| vkou wrote:
| > If enough doesn't get returned, the gov/centeral bank
| gives it to you as a bailout.
|
| No, the gov/central bank will give it _to the people you
| borrowed money from_ as a bailout.
|
| _Your_ equity will be zeroed out, _your_ executives will
| all be fired, and _your_ customer accounts will be fed to
| another bank.
| jampekka wrote:
| Citibank was bailed out, the stock rose over 50%
| overnight and the CEO got paid hundreds of millions.
| alexb_ wrote:
| You realize bailouts are _loans_ , right? They aren't
| just free money.
| jampekka wrote:
| There were many forms of bailout for Citibank (and
| others). Some were (extremely favorably termed) loans,
| some government backing of their bad assets and some were
| buying stock that the market didn't want to touch.
|
| May or may not be technically free money, but for sure
| Citibank doesn't hand out loans to bankrupt customers on
| such terms.
|
| The gov could have e.g. let Citibank go bankrupt and just
| take it for free. Like banks do to their customers.
| vkou wrote:
| Citibank shareholders got diluted, and Citibank _paid
| back_ for that bailout, with the taxpayers profiting ~12
| billion in total.
|
| If the money couldn't have been paid back, the
| shareholders wouldn't have been diluted.
|
| They would have been _wiped out_.
| jampekka wrote:
| If the gov wouldn't have bailed out Citibank the
| shareholders would have been wiped out in the first
| place. And gov would have gotten it for essentially free
| if wanted. It was not like they saw that here's a great
| investment opportunity to make profit for taxpayers.
| immibis wrote:
| No, that's not how it works. They did this a few times,
| even a few high-profile cases, but the vast majority of
| times they just gave money to the struggling bank.
| skybrian wrote:
| That's not how it works. When a bank makes a loan, the
| customer will use it to buy something (say, a house), and
| probably the money will be put in a different bank. So the
| money definitely needs to be there, to pay the other bank.
|
| There's a deposit in the other bank, along with the payment.
| Both of which are "money."
|
| So, a bank can create money from thin air by making a loan,
| but typically not for themselves. It happens in a different
| bank.
| immibis wrote:
| I want to make it a point that EVERYONE CAN DO THIS. Everyone
| can make a loan, everyone can count their un-returned loans
| as money if they want to, and everyone can accept transfers
| of other people's un-returned loans as payment if they want
| to. The only special power banks have is that most people
| accept them doing this. If your whole friend circle accepts
| un-returned loans from each other as payment, then you're all
| doing fractional reserve.
| jampekka wrote:
| The special power is the banking license they get from the
| government. Try to do it without and you'll find yourself
| in prison quite soon. Especially if you do it in official
| currency.
| abdullahkhalids wrote:
| > A good example is that when it was proposed that one should
| be able to transfer their account number to another bank (as
| telecoms have to do for phone numbers here in Finland at
| least), the bank lobbyists said this is technically impossible,
| which is of course ridiculous.
|
| If you mean the bank account numbers used within Finland, sure,
| they can be changed. In the new system, there will be country-
| wide database which will now indicate which bank each account
| number is associated with. But your account also has an IBAN
| number, which has country and bank/institution identifiers.
| Those will have to change if a customer moves banks, absent an
| international finance law change.
|
| And my understanding is that its quite common to use IBAN
| everywhere. So you won't really solve the problem. Just add
| another layer of complexity.
| jampekka wrote:
| I mean't that you can't change the bank and keep your old
| account number. IBAN is just the "Finnish" number with FI
| prefixed and check digits appended. Though probably the old
| numbers too have per-bank allocated prefixes. BIC identifies
| the bank.
|
| As far as I and a quick web search know, you can't make any
| of these refer to an account in another bank.
|
| Is IP over MAC or DNS over IP just another layer of
| complexity?
| abdullahkhalids wrote:
| The point is that in your proposed system in which the
| customer keeps their local bank account number when moving
| banks, there will still be places where the customer will
| have to change their number - i.e. everywhere where their
| IBAN is stored. The IBAN cannot remain the same, because
| international institutions need to know which institutions
| they are dealing with. Not all institutions are legally
| allowed to or want to transact with all institutions.
|
| So the added layer of complexity is that customers will
| have to change their number in some places but not in
| others. And banks will have to have a system of ensuring
| they match the right IBAN with the right local account
| number. Whenever this fails, there will be problems such as
| delays or money being deposited in wrong accounts etc.
|
| This is unlike DNS over IP, which is
| universally/internationally agreed protocol which has 100%
| coverage. But even in that system, whenever you change your
| DNS settings, it takes a while to propagate, and in this
| time there are all sorts of weird errors. Cat picture
| websites can tolerate those sorts of errors. Financials
| institutions should not.
| immibis wrote:
| Can't Finland register the whole FI prefix as institution
| "Finland"? If other countries' institutions need to know
| the actual institution, well... it wouldn't be the first
| time two countries had conflicting requirements, and
| politicians had to get together and yell at each other a
| bunch and suddenly a law was passed to solve it.
| jampekka wrote:
| You mean universally/internationally agreed protocol and
| maybe a set of laws like e.g. IBAN?
|
| The bank numbering system was indeed a static routing
| code, like phone numbers were in old landlines. Why the
| former can't be changed but the latter could?
| abdullahkhalids wrote:
| Of course the IBAN system can be changed. It will just
| require a revision of international treaties, which will
| require dozens of countries agreeing to it. Finland has
| little control there.
| namdnay wrote:
| > When you have literally a license to create money out of thin
| air
|
| This is a common but slightly misleading interpretation of
| fractional reserve banking.
|
| If I lend you 100 bucks and you lend those 100 bucks to someone
| else, you've "created 100 bucks" in a monetary sense. But it's
| not coming from thin air, from an accounting perspective it's
| just a debt moving from one person to another
| kaibee wrote:
| Yes, but when I deposit $100 with @Bank (ie, effectively
| lending $100 to the bank), they aren't loaning out $10 to a
| couple people, they're lending out $100 to a couple people,
| because they did the math and figured that they can get most
| of those people to pay them back before I ask them for my
| $100 back. This is all well and good, but they really are
| creating money out of thin air when they're loaning out more
| money than they actually have on hand.
| xcrjm wrote:
| > A good example is that when it was proposed that one should
| be able to transfer their account number to another bank (as
| telecoms have to do for phone numbers here in Finland at
| least), the bank lobbyists said this is technically impossible,
| which is of course ridiculous.
|
| This comparison doesn't make a ton of sense. Of course you can
| transfer your phone number - every phone number is mandated to
| be unique across all carriers. Bank account numbers are
| entirely internal to each bank and made up based on various
| arbitrary factors. What if the bank you want to move to already
| has an account with the same number as your account at your
| existing bank? How would that work?
| jampekka wrote:
| May depend on the country, but at least in Finland the
| account numbers have been unique across banks for ages. The
| first part refers to the bank (actually a branch at least
| back in the day) and the last part to the account within the
| bank. There was and is no need to specify the bank
| separately.
|
| The mobile phone numbers had the same system. Three first
| numbers signified the operator, but the whole number it can
| now be transfered to another operator.
|
| This is not hard stuff. The numbers aren't magic, they're
| just identifiers. We're not bound to mechanical routers or
| card sorting machines anymore.
| techsupporter wrote:
| > And, as a particular thing which could help unlock that: if one
| cares a lot about the experience of people at the socioeconomic
| margins, one should perhaps spend less time fulminating about
| greedy capitalists and spend more time reading Requests For
| Public Comment by relatively obscure parts of the administrative
| state.
|
| For what it's worth, there are a _staggering_ number of people
| doing political advocacy who follow these sorts of things. The
| main problem is, unless you are inside that system, there is no
| (scalable) way to know which relatively obscure parts are about
| to do something that you want to comment on. And, as patio11
| wrote out, it 's a massive system that has been layered on top of
| layers.
|
| Part of the reason why spend "time fulminating about greedy
| capitalists" is because those "greedy capitalists" are the ones
| _inside the system_. Hell, a good amount of time, advocates are
| having to spend time pushing back against "greedy capitalists"
| because the status quo is already known and understood, but a
| change would cost money even if it is beneficial so the change
| must be opposed.
|
| What advocacy could really use is more people who have this deep
| understanding and can write out lengthy articles like this
| explaining all of the ins-and-outs to come along with the
| advocates as a guide. The problem is, the economic and cultural
| incentives don't work like that.
| cafebee wrote:
| > For better or worse, the side channels are not an accident.
| They are extremely intentionally designed. Accessing them often
| requires performance of being a professional-managerial class
| member or otherwise knowing some financial industry shibboleths
|
| What is meant by side channels here? Is it writing "a paper
| letter to the VP of Retail Banking", as mentioned elsewhere in
| the article? That doesn't seem "intentionally designed", so the
| author must be referring to something else, but I don't have the
| imagination to guess it
| RationalDino wrote:
| That is an example of a side channel.
|
| That's the kind of thing done by people who the bank really
| doesn't want to offend. The bank decided it wants that to work
| for them. Therefore the bank created a way of making sure it
| works.
|
| That it is not documented or advertised is a feature.
| seraphine wrote:
| Not sure if this is what he meant but you can call a bank or
| visit a branch, get a phone number for a specific department
| and call them directly and get almost VIP levels of helpful
| service in my experience.
|
| Something that would entail hours of phone support thru
| official channels cut down to 15 minutes. Once you discover
| this there's no going back and it all depends on who you ask,
| and how you ask.
| timerol wrote:
| The "intentionally designed" part isn't just the mail, it's the
| process that comes after receiving mail. The VP of Retail
| Banking does not read their own mail. Who does read that mail?
| How are various letters delegated to appropriate teams? What
| letters are discarded or given a canned response? How does the
| bank make sure that it doesn't ghost people (most of the time)?
| It basically needs an entire support system, which may or may
| not rely on parts of the official support system
| tomjen3 wrote:
| And now you wonder why wanted crypto to succeed. It was not
| because it was quick way to make money: It was so that banks had
| to compete with real technology and so that no one ever had to
| have their lives savings stolen by bankers with no recurse.
| timerol wrote:
| > so that no one ever had to have their lives savings stolen by
| bankers with no recurse.
|
| This is meant sarcastically, right? Crypto is extremely
| efficient at causing people's life savings to evaporate
| immibis wrote:
| Not by bankers, so it's all good. I will say, PancakeSwap
| stole a trivial amount of my money, and probably more of
| other people's. Are they bankers?
| shakow wrote:
| The Forex is equally extremely efficient at vaporising life
| savings, still you wouldn't say that's the fault of the
| dollar/euro/yen/yuan/dinar/...
| ranger207 wrote:
| The story of crypto is the story of recreating the existing
| financial system from scratch, particularly including all its
| regulations that make the current modern financial system so
| annoying. Yes, the current financial regulations suck, but each
| one was put into place because of failures like you see in
| crypto every day. In the long run cyrpto regulation will wind
| up looking much like modern financial regulation because it
| suffers from the same pressures, incentives, and attack
| surfaces as the modern financial system. This isn't to say that
| the current financial regulation regime is good in any sense of
| the word, just that it's effective at what it's explicitly
| designed to respond to. Crypto that lacks the regulation of
| modern finance will suffer from one set of problems; modern
| financial regulation suffers from another set of problems
| emergent from the system of regulation itself. That crypto
| doesn't suffer from problems caused by the system of
| regulations does not make it inherently better than modern
| finance
| abdullahkhalids wrote:
| Cryptocurrencies had two main goals
|
| - Let individuals freely transact. Which as you rightly point
| out, has failed for good reasons.
|
| - Prevent state institutions from controlling monetary
| policy. This has not failed yet - mainly because crypto is
| not even remotely big enough that the state has tried to
| control how much cryptocurrency is printed. If cryptocurrency
| ever gets big enough, we will find out whether it can
| withstand the pressure. While cryptography to secure your
| communications has withstood state pressure for 30 years now
| to not allow backdoors, I think the pressure on
| cryptocurrency will be higher.
| popol12 wrote:
| I disagree with your first point, Bitcoin let has let
| individual transact freely for a decade now. Sure, it has a
| hard time scaling but apart from that I think it's doing
| great on this point. Could you detail what you had in mind
| if you disagree ?
| immibis wrote:
| There are fraud prevention institutions out there who
| secretly colour your coins and won't let you deposit to
| an exchange (or trigger some very intensive verification
| and a police report) if you try to deposit certain coins.
| mattdesl wrote:
| > Let individuals freely transact. Which as you rightly
| point out, has failed for good reasons.
|
| How has it failed on this metric? A user holding crypto can
| transact freely and without intermediaries, that much is
| true of the blockchain. That some governments around the
| world may decide to restrict this activity with the threat
| of force (some countries more than others) does not mean it
| isn't achieving its goals of a permissionless digital
| network.
| abdullahkhalids wrote:
| Of course, X can send Y cryptocurrency, and Y will
| receive it.
|
| The problem is that for the vast majority of people, the
| only way for X to acquire the cryptocurrency is to sign
| up for an exchange. And for Y to actually use it, they
| will have to convert to fiat via an exchange. And when
| signing up, X and Y will have to reveal complete
| financial details about themselves - home address, bank
| account details, identification document scans, etc.
|
| This means that governments across the world now exercise
| significant control over who you transact with. And how
| much tax you pay for your crypto activities. If
| governments don't like you, they will force the exchange
| to kick you out. Or they will block all your bank
| accounts - like my own country often does - almost
| completely destroying your life.
|
| This is a far cry from the early dreams of
| cryptocurrency, where people thought that governments
| would have close to zero control over their transactions.
| Yes, right now, crypto is a bit more free than other
| types of transfers, particularly for international
| transactions, but the noose tightens every year.
|
| It doesn't matter what the technical details of the
| protocol are, what matters is what you can do in
| practice.
| valcron1000 wrote:
| > Let individuals freely transact. Which as you rightly
| point out, has failed for good reasons.
|
| How has this failed? Every month I transact in crypto while
| I could not do the same using traditional methods.
| immibis wrote:
| And yet cryptocurrency managed to recreate its own equally
| complicated messes! E.g. lightning network, bridge tokens, swap
| routers, parachains.
|
| It turns out that scalable distributed systems are really hard,
| and scalable secure distributed systems are even harder - who
| knew.
| yboris wrote:
| The book _Seeing Like a State_ referenced in the article is an
| amazing read:
|
| https://www.amazon.com/Seeing-like-State-Certain-Condition/d...
|
| Highly recommend, though glance at summary to confirm you'll
| enjoy / benefit:
|
| https://en.wikipedia.org/wiki/Seeing_Like_a_State
| orliesaurus wrote:
| ty bought it
| tomjakubowski wrote:
| one of the great books on understanding corporate management
| too.
| RachelF wrote:
| and if you want some rather funny videos on this topic:
| https://www.youtube.com/results?search_query=reasontv+uninte...
| Symmetry wrote:
| It's a great book but one sided in its analysis. I'd recommend
| pairing it with a book about a case where High Modernism worked
| great, like The Ghost Map or something.
|
| https://www.goodreads.com/book/show/36086.The_Ghost_Map
| nomat wrote:
| It would be cool to map the relationship between a book getting
| linked on HN and its checkout rate at the local public library.
| That's usually the first place I head when I see something I
| want to read on here.
| spicymapotofu wrote:
| Your local library has a much better offering of niche non-
| fiction than mine. Many of the texts I see here aren't even
| available through my school's cross country academic network.
| I did read this book that way, but I had to wait for it to
| come quite a distance.
|
| My city's newest library is an art piece with less books than
| any other here, to be fair.
| gniv wrote:
| Interesting read, as usual.
|
| "You can understand why, right? From their perspective, they were
| just going about their life, doing nothing wrong, and then for
| some bullshit reason the bank charged them $35."
|
| I'm not sure it's quite right to blame this on math illiteracy. I
| think some people are still in denial on bank fees.
| immibis wrote:
| The reality is the person also got paid $500 on the same day,
| but even though the paycheck arrived early in the morning, the
| bank chose to process it late at night to collect that $35
| overdraft fee in the meantime.
| sherlock_h wrote:
| Great article. Explains the chalenges that I just had with having
| all money frozen with Marcus.com. It is literally impossible to
| break through these layers of support in order to get your case
| heard / solved. The biggest challenge is that it's so
| intransparent with very little communication from the bank as to
| how a support case is actually moving through and how close it is
| to getting resolved.
| woodruffw wrote:
| > Sometimes the bank will have ability to e.g. share context
| between their screen and the Tier 2 rep; sometimes they're
| literally incapable of proving to the bank that they work there.
|
| I've experienced this one directly: I ran into an issue with a
| large transfer between banks a few years ago, and watched with a
| mixture of amusement and anxiety as the branch employee was
| unable to prove his identity to his counterpart on the line. He
| was supposed to share some kind of OTP to prove that he was in
| front of a branch computer, but whatever microservice was
| responsible for generating and/or delivering the OTPs was
| offline.
| cratermoon wrote:
| This could also apply to the way airlines see passengers. In my
| experience, passenger information is scattered across different
| systems and representation. One system tracks the reservation
| itself, which has information 1 or more passengers. Another
| system tracks the fare and various feeds paid or due. Another
| tracks check-in status. Yet another has seating information. Bags
| checked live somewhere else. There's not a common key. There are
| of course confirmation numbers (those 6-character codes), but
| only after a reservation is confirmed. If a person has a frequent
| flyer code, that's another key.
|
| As the passenger moves through the system, each different subset
| of attributes is attached only to the system in which it lives,
| and cross-correlating a passenger across systems is done in
| numerous ad-hoc ways.
|
| The customer service folks have a lot of tribal knowledge, and if
| you happen to get an experienced one, they can really smooth the
| way. During the pandemic, though, a lot of people left the
| industry, and a lot of knowledge just walked out the door.
| donalhunt wrote:
| > Ops feels like the world is on fire because the world is always
| on fire
|
| This gave me a chuckle. :)
| creeble wrote:
| Funny comment about First Republic and Chase.
|
| I too have/had a mortgage at FR and I now see it in my existing
| Chase account (maybe the balance is even correct, pretty hard for
| me to know), but I have no idea whether they are going to still
| take the payment out of my FR checking account, despite their
| official transition page saying "all automatic payments will be
| transferred as well."
|
| I guess I can't take the money out of my FR account until I know.
| numlocked wrote:
| Too funny. I am in the _exact_ same boat. For what it 's worth
| I spoke to their customer service (Chase) yesterday who
| indicated that the auto-payment would continue to work as it
| always had, but will process "10 days late". So I'm expecting
| it to come out of my FRB account on the 10th or the 13th.
|
| I was also caught totally off-guard when I logged into FRB and
| it informed me my mortgage had been closed. If I didn't have a
| Chase credit card (and saw my mortgage there when I went to pay
| the credit card) I'd probably still be baffled.
| creeble wrote:
| I think I also saw that only this _first_ auto-payment will
| work -- after that you have to set it up at Chase if you want
| to continue auto-payment.
|
| One thing I found out about mortgage auto-payments at FRB was
| that they wouldn't take the money out unless there was enough
| in the account within the first 6 days of the month. They
| would automatically check every day, and if the balance was
| high enough, they would take it out. On the 7th day I guess
| they would send you an overdue notice (and maybe keep
| checking? no idea). They could only do this because they
| owned both accounts.
| toasted-subs wrote:
| Idk man, it seems like banks use swift to communicate. Imo Taylor
| swift is a united person, the banks are relying on the foundation
| of credit unions. Which have me at the very tip. Y'all want aids?
| Seems like you have it.
| pdntspa wrote:
| I didn't read the article as it appeared to go off on tangents
| that don't really get to the heart of the matter: SARs and
| everything else are super super secret and there are severe
| penalties for even cluing someone in about them. There is a lot
| of bullshit clockwork that is hidden from consumers under the
| guise of anti-money-laundering and anti-organized-crime stuff. If
| I recall the training correctly, you aren't even allowed to
| acknowledge there is this whole secret process!
|
| Which is stupid. All of this is because FinCEN has banks by the
| balls
| gravitate wrote:
| What about 'neo banks'? I am with Revolut free tier and I know
| why they have a free tier/basic tier, because I know they
| monetize my bank statements and purchase habits for 'market
| research' and other insights.
| grishka wrote:
| I don't know what banking is like in the US, but having to deal
| with a UAE bank was a culture shock for me. This article made me
| understand _why_ it 's so shitty. No one seems to want to do
| their job. Everything -- I mean _everything_ -- takes ages. The
| branch employees are utterly powerless. The only thing they can
| do right there and right now is cash transactions, everything
| else requires a form to be filled and signed and sent "to the
| back office" for the thing you asked for to _maybe_ happen in "3
| to 5 working days". I have only tried calling them once. They use
| a toll number, but then still try their hardest to "solve your
| issue" through an automated voice menu before you have any chance
| to talk to a real human. Writing to the right person directly to
| their work email sometimes gets your problems solved very quickly
| though.
|
| It was a culture shock because I'm Russian and banks don't play
| as important of a role in our society because of the Soviet past.
| Yes, most of our population has a bank account these days. Yes,
| most people are paid by transfers to that account. But -- our
| entire banking system _was built from scratch in the 90s_. So if
| you have an issue and you go to a branch to get it sorted, you do
| get it sorted on the spot by a branch employee. It probably also
| helps that many Russians "don't trust banks" so they'd go to an
| ATM on their payday and withdraw their entire salary and use cash
| for all their transactions. We've also never had checks, we
| skipped that entirely. We also have this nifty SBP system that
| allows you to instantly make a transfer from any bank to any
| other bank using just the recipient's phone number. Very useful
| for things like splitting bills. I was shocked to find out that
| most other countries don't have anything like this and even
| sending someone money within one bank is quite _a process_.
| nologic01 wrote:
| There should be more of this. Much more. From different angles
| and view points but with the same clarity and directness.
|
| Banking is in a deep, existential crisis for decades now and the
| march of digitization only increases the pressure to find a way
| forward.
|
| In response techno-solutionists imagine all sorts of
| replacements, whether it is "fintech", or "banking-as-a-service"
| or "crypto" but all are hopelessly shallow and incomplete, almost
| insultingly crude.
|
| What is entirely missing from these neobanking movements is any
| straight definition of what is the _purpose_ of banking and
| bankers. What is their irreducible value proposition that cannot
| be delegated to machines and algorithms. What is their role in
| society. Are they allies or enemies of surveillance capitalism?
| Are their users clients or products? Can there be an honest
| relation with the sovereign monetary system and the lender of
| last resort or is private banking a scheme to privatize profits
| and socialize losses? Last but not least, what role, if any,
| should they play towards environmental sustainability.
|
| The questions and challenges are pilling up and there are no
| breakthroughs worth mentioning. In a parallel universe we might
| have something like BN (banking news), where all sorts of
| individuals, teams small or large, would pimp their blogs,
| radical ideas, open source solutions or fancy software products,
| but above all a positive, forward looking vision for a crucial
| sector.
| iamleppert wrote:
| Treat bank accounts like an unreliable host. You wouldn't have a
| single database instance running your entire business like you
| shouldn't have a single bank running your business.
|
| Open multiple accounts and when one starts acting up change it
| out for another. Always have several bank accounts at the ready.
|
| Every transaction you make has risk, counter party risk extends
| to your financial institution as well.
|
| You should be running drills every quarter and randomly switching
| up your bank. Don't be a victim when you have engineering
| solutions to these problems!
|
| If you have money in an account at a bank for business
| operations, keep that in a completely separate bank and legal
| entity than the one with a risky transaction profile. Use an
| intermediary bank to receive deposits from the likely to close
| bank account that transfers money out immediately to your
| operational account, and make sure it's at a competitor. Banks
| don't share info and you can take advantage of slow processes and
| communication delays to give enough time to fix problems with a
| flaky bank before they impact your business. Think of it like a
| firewall for your business.
___________________________________________________________________
(page generated 2023-11-07 23:00 UTC)