Every few weeks we seem to have, somewhere, a lead or a story about bank X is a scam. This month is no exception.

Rather than delve into a murky world of claim and counter-claim I thought I'd find out how many banks there are in SL. Had there been fewer I might have considered visiting each, finding out about their terms and conditions and writing a deeper article about them. If there is enough demand I still might. I was rather surprised, after searching for bank, and excluding things like "on the bank of river Y" to find there were 10 banks remaining. Some are solely within SL, some are tied to RL banks, some it proves hard to tell from a quick read.

Banking in SL is rather different to banking IRL. IRL, in most countries anyway, banks are quite tightly regulated. It is worth pointing out the, as the collapse of Baring's Bank in 1995 shows, all the regulations in the world don't actually prevent banks collapsing, they just make it harder and less likely. This, in brief, is also why the banks are regulated. Most of the major first world economies started with unregulated banks, where you invested your money on trust, reputation, and not a little hope: rather like Second Life now in most cases. Because enough of these banks suffered, particularly in British history with the South Sea Bubble, and in US history with the great depression, government stepped in to protect itself and its citizens.

SL, as we all now, is wildly unregulated. That certainly includes the banks. If you invest in any bank in SL you are investing on trust - even if it is the trust that a bank that claims to be the SL face of a RL bank is genuine. The more things you can find out about the bank, how it's run and so forth the less risk you are taking, but you are still putting your money into trust with someone that has no, at least as far as we can tell, legally enforceable duty to you. I have seen no evidence that any of the banks are breaking any laws. I have seen a lot of speculation that bank X, Y or Z is a scam, be it a ponzi, pyramid or whatever. I'm not your lawyer, nor your financial advisor, but for what my advice is worth: unless you have incontrovertible proof that a bank is honest, legal and above board (you'll have to decide what that proof is for yourself), don't put your mortgage, your pension plan or similar into a bank in SL. Put in money you can afford to lose, and hope that you don't. You might find your hopes are rewarded and you get richer than you'd expect. You might find your hopes are dashed and you lose your cash. That lack of regulation most emphatically does NOT mean the people are running the banks are crooks, but it equally emphatically DOES mean you should be cautious about your investments.