1. AGILE BANKING
Rebooting our Financial Infrastructure
Pelle Brændgaard @PelleB

2. I DONT NEED TO REMIND YOU...

3. BUT WE’RE IN DEEP SHIT!!!

4. BANKS ARE TOO BIG TO FAIL

5. WE’RE TO RELIANT ON THEM

6. TOO INTERMINGLED

7. THEY DON’T UNDERSTAND RISK

8. THEY DON’T EVEN UNDERSTAND
THEMSELVES

9. MANY VERY LARGE BANKS HAVE NO
CLUE OF THEIR OWN LIQUIDITY

10. ONE RISKY TRADE AND THEY’RE GONE

11. RISK

12. IS NOT A NUMBER

13. TRADERS LOVE RISK NUMBERS

14. RISK NUMBERS ARE CREATED USING
MAGIC FORMULAS

15. REGULATORS LOVE RISK NUMBERS

16. THE ONLY PROBLEM IS

17. THE BLACK SWAN

18. FIRST IDENTIFIED BY NASSIM TALEB

19. THE IMPROBABLE WILL HAPPEN

20. THE CURRENT CRISIS COULD NOT BE
SEEN IN THE NUMBERS

21. NUMBERS ARE GOOD FOR BLACK JACK

22. USELESS IN THE REAL WORLD

23. IN SHORT SHIT HAPPENS

24. ANY FIX MUST ACCEPT THIS

25. RISK CAN BE MANAGED

26. THROUGH LIMITS AND DIVERSITY

27. WHO IS GOING TO FIX IT?

28. THE BANKS?

29. TOO BIG TO FIX

30. THEY KNOW IT

31. IN OTHER WORDS THEY WANT
PROTECTION

32. WHO WILL PROTECT THEM?

33. THE REGULATORS

34. LOTS OF WORDS

35. LOTS OF MONEY SPENT

36. REGULATORS ARE NOT INNOVATORS

37. THEIR SOLUTION?

38. RAISE THE BARRIERS OF ENTRY

39. THEY THINK IT MAKES THEIR JOB EASIER

40. THEY ALWAYS REGULATE AFTER THE
FACT

41. WHAT WE NEED IS INNOVATION

42. SMALL STARTUPS AND ACTIVISTS

43. NO VESTED INTERESTS

44. CURRENTLY IT IS VERY HARD TO
INNOVATE IN BANKING

45. REGULATORS PROTECT THE OLD,
SCREW THE NEW

46. WE ARE STUCK WITH THE JOB

47. I HAVE A PLAN...

48. LETS GO BACK TO BASICS

49. BUT LETS REWIND A BIT FIRST

50. IN THE BEGINNING WAS THE BENCH

51. WELL MAYBE MORE LIKE THESE BENCHES

52. BANKERS KNEW THEIR CLIENTS

53. GENOA - THE HOME OF PESTO

54. ALSO THE THE FIRST COMPANY

55. THESE ALWAYS HAD A LIMITED PURPOSE

56. LIKE CONQUER AND TAX CHIOS

57. NOWADAYS COMPANIES ATTEMPT TO BE
GENERAL PURPOSE

58. BLUE BOTTLE COFFEE HIPSTERS

59. JONATHAN’S COFFEE HOUSE HIPSTERS

60. PEOPLE BOUGHT AND SOLD SHARES
OVER COFFEE AND GOSSIP

61. JOHN CASTAING STARTED TO KEEP A
LIST OF TRADES

62. JONATHAN’S TODAY

63. THE LONDON STOCK EXCHANGE

64. ALL OUR FINANCIAL INSTRUMENTS
CAME FROM THE GRASSROOTS

65. YET THERE WERE PROBLEMS

66. BUBBLES

67. TULIP MANIA

68. SOUTH SEA BUBBLE

69. MISSISSIPPI COMPANY

70. NOW LETS TALK ABOUT DOUG

71. DOUGLAS JACKSON AN ONCOLOGIST
FROM MELBOURNE, FLORIDA

72. HE WAS AN IDEALIST AND CREATED
E-GOLD

73. E-GOLD IS AN ECURRENCY BACKED BY
REAL GOLD BARS

74. YOU CAN USE IT TO INVEST IN GOLD,
MAKE AND ACCEPT PAYMENTS.

75. THEY CREATED AN EASY TO USE API
BEFORE PAYPAL

76. THEY LET THEIR USERS AUDIT THEM

77. HOW MUCH GOLD IS IN THE SYSTEM?

78. WHERE IS IT LOCATED?

79. SERIAL NUMBERS OF INDIVIDUAL BARS

80. REAL TIME STATS

81. MAILING LISTS KEPT THEM HONEST

82. COMMUNITY CREATE TOOLS TO SCRAPE
AND ANALYZE E-GOLD

83. E-GOLD REVENUE CALCULATOR

84. DOUG ACTED LIKE A BASTARD

85. STARTED SUING SEVERAL VERY NICE
PEOPLE

86. THE MAILING LISTS WENT BERSERK

87. DOUG WAS NOT VERY POPULAR

88. ALTERNATIVE MAILING LISTS WERE SET
UP

89. YET PEOPLE STILL USED E-GOLD

90. HATE THE GUY BUT TRUST THE GOLD

91. FEDS CAUGHT UP WITH DOUG

92. VERDICT?

93. CONSPIRACY TO COMMIT MONEY
LAUNDERING

94. HE WAS NOT PERFORMING “KNOW
YOUR CUSTOMER”

95. PEOPLE ARE STILL KIND OF USING
E-GOLD

96. WHY THIS HISTORY?

97. IT STARTS WITH PEOPLE

98. IT STARTS SMALL

99. IT STARTS LIMITED

100. BAD STUFF HAPPENS

101. MY PROPOSAL

102. SIMPLIFY!!!

103. CREATE SIMPLE LIMITED BANKS/FUNDS

104. ONLY ALLOWED TO DO ONE THING

105. A FUND HAS ACCOUNTS SIGNIFYING
VALUE

106. VALUE COULD BE ANYTHING

107. CASH, GOLD, STOCKS, BONDS, LOANS,
INSURANCE, SERVICE CREDITS

108. ECURRENCY TO REPLACE CURRENT
ACCOUNT

109. ECURRENCY IS A CASH MUTUAL FUND

110. NO FRACTIONAL RESERVE NO RISK

111. MAKE MONEY ON TRANSACTIONS OR
SUBSCRIPTIONS

112. COULD BE A COOP

113. MUTUAL FUNDS FIT RIGHT IN

114. LOANS COULD BE HANDLED LIKE
DANISH MORTGAGES

115. DANISH MORTGAGES ARE BONDS
ISSUED BY HOUSE OWNERS

116. BORROWERS ISSUE BONDS INTO THE
LOAN FUND

117. BORROWER BUYS BACK BOND TO REPAY

118. SMALL STARTUPS CAN INVENT NEW
SERVICES

119. P2P LENDING

120. MICRO LENDING

121. COMMUNITY CURRENCIES

122. MICRO STOCK OFFERINGS

123. BE TRANSPARENT

124. REALTIME DATA FEEDS

125. ALLOW THIRD PARTIES TO DIG

126. ALLOW MASS AUDITING

127. PROBLEMS WILL BE FOUND

128. LIMIT

129. ONLY OFFER ONE TYPE OF SERVICE

130. LIMIT SIZE OF ACCOUNTS

131. LIMIT AMOUNT OF ACCOUNTS

132. NO IT DEPARTMENT

133. NO CUSTOMER SERVICE

134. NO ACCOUNTING

135. TRUSTED THIRD PARTIES

136. CREATE TRUST

137. THE OWNERS CAN’T MAKE UP NUMBERS

138. 3 DIFFERENT SERVICE PROVIDERS

139. ALL PROCESS SAME TRANSACTION

140. DIFFERENCES CAN BE INSTANTLY
FLAGGED

141. WHAT ABOUT REGULATORS?

142. AN OBSTACLE TO INNOVATION

143. BELIEF THAT BIG IS SAFE

144. HARD FOR SMALL INNOVATORS TO
REGISTER

145. 350,000 MINIMUM CAPITAL IN EU

146. BANKS NEED MUCH HIGHER

147. FORMULA OVER ARBITRARY LIMITS

148. RESERVE = CIRCULATION

149. 10 ACCOUNTS *100 EURO

150. €1000 RESERVE

151. SIMPLE, SCALABLE, NO BARRIER TO
ENTRY

152. TERRORISTS, DRUG DEALERS,
TAX EVADERS, OH MY!

153. ARE YOU AIDING AND ABETTING EVIL
MONEY LAUNDERERS

154. REGULATORS SAY

155. KNOW YOUR CUSTOMER

156. VERIFY WHO THEY ARE

157. WHERE THEY LIVE

158. HOW DO YOU CHECK ID ONLINE?

159. FAX/SCAN AND SUBMIT ID’S

160. A HUGE BARRIER TO ENTRY

161. DON’T END UP LIKE DOUG

162. THE SMALLER THE ACCOUNT

163. THE LESS YOU NEED TO KNOW

164. HOW DO I KNOW YOU ANYWAY?

165. YOUR NATIONAL NUMBER DOES NOT
TELL ME ANYTHING.

166. IT IS MEANT TO PROTECT YOU FROM
REGULATORS

167. USE SOCIAL NETWORKS

168. EXPERIMENT WITH PAGE RANK LIKE
ALGORITHMS

169. WEBS OF TRUST

170. COULD TURN OUT BETTER THAN
NATIONAL ID’S

171. I KNOW YOU!=CREDIT

172. COULD BOOTSTRAP ALTERNATIVE
CREDIT RATING

173. WHAT ABOUT RISK?

174. ACCEPT IT

175. BUT LIMIT IT

176. PEOPLE WILL LOSE MONEY

177. IF AN ECURRENCY GOES BUST YOU
CAN’T LOSE YOUR MONEY

178. GOVERNMENT BANK GUARANTEES ARE
NO LONGER NECESSARY

179. BANK RUNS ARE NOT POSSIBLE

180. RISKY INVESTMENTS ONLY AFFECT
DIRECT INVESTORS

181. HOW DO WE BUILD THIS?

182. OPEN WEB FRAMEWORKS

183. OPENID NOT ACCOUNT NUMBERS

184. OPENID IS A UNIVERSAL ID

185. IT REPLACES USERNAME/PASSWORD

186. ALREADY WIDESPREAD

187. NEED GUIDELINES FOR HIGH SECURITY
OPEN ID’S

188. OAUTH A NEW WEB SECURITY
STANDARD

189. IT LETS ALL YOUR APPLICATIONS TALK
TOGETHER

190. NEW SIMPLE FINANCIAL
STANDARDS

191. WIDELEDGER

192. SIMPLE FINANCIAL EXCHANGE FORMAT

193. IT’S CONTAINS ONLY VERY BASIC
TRANSACTION INFORMATION

194. USES MICROFORMATS EMBEDDED IN A
NORMAL WEB PAGE

195. MAKES IT EASY FOR YOU TO BRING YOUR
FINANCIAL INFO TOGETHER

196. MAKES IT EASY TO CREATE FINANCIAL
MASHUPS

197. OSS FINANCIAL SOFTWARE

198. LEDGER SOFTWARE

199. EXCHANGE SOFTWARE

200. HOSTING PROVIDERS

201. AUDITING SERVICES

202. BUT WHAT ABOUT THE
REGULATORS?

203. THEY MEAN WELL BUT NEED PUSHING

204. CHANGE HAS TO COME FROM THE
GRASSROOTS

205. BRAVE FINANCIAL REBELS

206. BETTER TO ASK FORGIVENESS...

207. LIMIT YOUR RISK AS A REBEL

208. THINK SMALL, THINK COMMUNITY

209. SMALL COMMUNITY CURRENCIES

210. COMMUNITY LENDING

211. PROJECTS WITH A PURPOSE

212. THE CHRISTIANIA OF FINANCE

213. FORCE REGULATORS TO THINK SMALL

214. ENGAGE THEM

215. SHOW THEM IT WORKS

216. AND IT MAKES THEIR JOB EASIER

217. THEN SCALE

218. LIMITED PURPOSE BANKING
A PROPOSAL BY KOTLIKOFF AND
GOODMAN

219. SEEMS SIMILAR BUT WITHOUT
GRASSROOTS

220. PROGRAMMERS, ENTREPRENEURS,
ACTIVISTS, LAWYERS, ACCOUNTANTS

221. WE NEED YOU

222. I WANT TO HEAR FROM ANYONE WITH
AN INTEREST IN THIS

223. NEW GOOGLE GROUP “AGILE-BANKING”

224. ATTEND A BARCAMPBANK

225. PHOTO CREDITS
• http://en.wikipedia.org/wiki/File:Trapezus.png
• http://www.flickr.com/photos/michaelroper/1983104/
• http://www.flickr.com/photos/yannic/3338219365/
• http://www.flickr.com/photos/clankennedy/2440414620/
• http://www.flickr.com/photos/35822266@N03/3318376935/
• http://www.flickr.com/photos/danube/19409384/
• Wired, City of London - ahem you’re CC right?

226. ABOUT ME
• http://twitter.com/PelleB
• pelle@stakeventures.com
• http://stakeventures.com
• http://agree2.com Agree2 my startup - Reach Agreement without Paper, Pen and FedEx