Real money vanishes in virtual banks with global financial crisis

The Economist of this week (26 Jan 2008) reports that a dozen virtual banks inside Second Life have been closed due to problems with the interest rates. Yes, yet another phenomenon we have to learn to live with as the real world and virtual world collide. Banking regulations are very strict in the real world, after centuries of failures of major banks, runs on money, etc. Again we see it now from Northern Rock in Scotland to the seven billion dollar investment fraud by an executive at Societe Generale. Even with "real world" banks, of some of the most reputable banking nations (UK and France) with very strong banking regulations and oversight, we find problems from time to time. How will that be in unregulated virtual worlds. A sad bit of news on the path to the future.