Fractional Reserve Banking

Loans is one way of making your money work for you but lets make loans work harder and reflect real world finance by letting us loan a multiple of our cash reserve. This will add a massive amount liquidity and can allow the current set interest rate to float based on gamemaster set liquidity or Q&E controls. The functions should be relatively simple to implement and will add a very fundamental aspect of the economy to the game.

I'd be happier with them allowing the finance of loans move to real time like the actual consumption and spending of these loans happen. In real time. Probably won't happen though.

Fractional reserve would create way too much money to lend. It's already very improbable to lend all of one's cash. There isn't enough demand for loans.

It would be more interesting if the loan market were completely run by players. Let lenders set their individual interest rates, and let borrowers choose which loan offers to accept.

But that's been proposed repeatedly. The Gamemasters don't like free markets.

This is unrealistic because nobody was looking at the interest rates when they were floating in the past.

It is the same as with the oversupply and shortages of products.
You can let the price shoot sky high and wait for someone to setup a corporation but nothing happens.

we had some errors in the past when a single product went all the way up.
the only new corporations producing that product were created by the automatic procedure that creates corporations in C3 countries.

The issue is probably too complex.

Free market is great but you need people to understand it and play it.

This game is designed as a chase for gold coins. That trivializes profit from free markets.

I agree that most players haven't seemed to care about the difference in interest rates. The greater incentive has been to get GC awards, not to save game cash by getting cheaper loans.

A similar problem exists with corporation management. There is little incentive for players to analyze the market so they can create the most profitable corps. The incentive is merely to create more corps so they can get GC awards for levelling up.

The essence of a free market is profit motive. But the game encourages the pursuit of GC, not the pursuit of cash from operating profits. That's what players understand and play.