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Author: Lysander Lyon, MP
Sponsor: N/A
Type: Act of Parliament
1. Short Title
(a) This bill shall be referred to as the "Better Banking Act 2.0".
(b) This bill was authored by Lysander Lyon.
(c) This bill repeals the Better Banking Act.
2. The Bank of Azalea
(a) The Bank of Azalea shall be maintained as an entity that is part of the Azalea Isles government but with distinct autonomy.
(b) The Bank of Azalea shall engage in policy in such a way as to best benefit the citizens of the Azalea Isles in the longer term.
(c) The Bank of Azalea shall have a Chairman of the bank, appointed by the Prime Minister and confirmed by Parliament.
(i) The Chairman of the Bank of Azalea shall be appointed for life.
(ii) The Chairman of the Bank of Azalea may be recalled by Parliament by motion, so long as the motion passes with a majority of Parliament (currently five votes, as that is a majority of nine seats).
(d) The Chairman shall lead the Board of Governors, and which shall have four members total.
(i) Two Governors shall be nominated by the Chairman to Parliament and confirmed by a simple majority of votes cast on their nominations.
(ii) If no vote is held on a Governor’s nomination within 7 days of it being made by the Chairman, the Governor is automatically appointed on the 8th day, and begins the term then. Parliament may later vote to accept or reject the nomination: if rejected, the Governor immediately ceases holding the role, while if accepted, the Governor is simply confirmed, but the term length is still counted from that 8th day.
(iii) The appointed Governors shall serve terms of three months (for example, January 14th through April 14th).
(iv) The fourth member of the Board of Governors shall be the Minister of Economic Affairs, but this role shall be non-voting and shall not count as a position for the Minister’s limit under the Representation in Government Act. The Minister may still participate in debates and has the full rights to see into the bank’s actions as a normal Governor.
(e) Individuals appointed to a vacancy receive a fresh three month timer on their term; that is, if a Governor resigns two months into their term, the appointee to replace the resigned Governor does not only have one month left, but instead has a fresh three months either from Parliament’s confirmation or from the 8th day after the nomination is made, depending on the circumstance.
(f) The Chairman is responsible for breaking any ties, operating the bank, and managing the meetings.
(g) Parliament may give the Bank of Azalea an endowment in their monthly budget, which shall be a sum of money transferred to the Bank of Azalea to assist in its operations.
(h) Each Governor, and the Chairman, must cast their own vote.
(i) The decisions of the Bank of Azalea should be voted on by the Board of Governors, whether they are setting requirements or changing policy or approving loans or any other bank power or function.
3. The Functions of the Bank
(a) The Bank of Azalea may set a minimum reserve requirement for all financial institutions, or by financial institution, which shall be the minimum percentage of deposits the institution is required to reserve, meaning they cannot be lent out or invested.
(i) For example, a 30% reserve requirement means 30% of all client deposits must be held by the bank, and cannot be invested or loaned out,
(b) The Bank of Azalea may set a minimum holdings requirement for all financial institutions, or by financial institution, which shall be the minimum percentage of reserves the institution is required to hold with the Bank of Azalea.
(i) For example, a 30% holdings requirement means that 30% of deposits the institution is required to hold need to be given to the Bank of Azalea for holding. IE, a bank with $100,000 in deposits needs to hold $30,000 in reserve, and $9,000 needs to be given to the Bank of Azalea.
(c) The Bank of Azalea may choose whether it allows institutions to deposit more funds with the Bank of Azalea than required by the minimum holdings requirement. This policy shall be known as the Institutional Deposit Policy.
(i) The Institutional Deposit Policy will be yes, the bank allows deposits in excess of the holdings requirement, or no, it does not.
(d) The Bank of Azalea may set an interest rate it pays out on institutional funds deposited with the bank, and may set a different rate (or a rate of 0%) for funds deposited in excess of the minimum holdings requirement, or in excess of the minimum reserve requirement.
(i) For example, the Bank of Azalea could set a 2% monthly interest rate on funds held within the minimum holdings requirement amount, a 1% monthly interest rate on funds held over the minimum holdings requirement but up to the minimum reserve requirement, and a 0% interest rate on funds over the reserve requirement.
(ii) For a $100,000 bank depositing everything with the Bank of Azalea, and holdings and reserve requirements of 30%, that would look like this: $30,000 would receive 2% interest, $30,000 would receive 1% interest, and $40,000 would receive 0% interest.
(e) The Bank of Azalea can set the time period for reserve updates, which is how often institutions must file a report informing the bank how much money they have in client deposits, and then update the amount of reserves held with the bank if needed.
(f) The Bank of Azalea may issue loans to financial institutions, or to the government, and shall have the power to set the terms on the loan (interest rate, repayment period, collateral, etc.).
(g) The Bank of Azalea shall be granted the authority to regulate financial institutions with policies relating to interest rates, fees, disclosures, and other policies related to the operation of the banking industry.
4. Insurance
(a) Financial institutions may request deposit insurance from the Bank of Azalea, up to a maximum of 20% of deposits and $20,000 per individual.
(b) The Bank of Azalea shall evaluate the institution, and determine a fee to be levied as payment for the coverage.
(i) The fee may be either a monthly flat fee, like a payment of $5,000, or a percentage of profits, like 10% of net income.
(c) Institutions insured by the Bank of Azalea may be audited by the bank at any time, and may have different or additional requirements levied on them, such as a higher reserve requirement or additional informational disclosures to be provided to the Bank of Azalea.
5. Public Notification
(a) The Bank of Azalea’s policies should be accessible in the government agencies Discord server, or upon request in a ticket.
(b) The Bank of Azalea should provide announcements to the public when policies are changed, added, or removed, with a summary of these changes provided at the end of each month, when possible.
(i) Summaries are encouraged to be monthly, but must occur once every two months at minimum.
6. Credit Ratings
(a) The Bank of Azalea shall be tasked with coming up with a credit rating system. Upon the completion of this research and planning, the bank shall propose an amendment to replace this section with the new credit rating legislative foundation.
7. Oversight
(a) Parliament may order an audit of the Bank of Azalea and its operations at any time by simple majority motion, although there must be a minimum two months between the end of one audit and the beginning of another.
Enactment: This Act comes into force immediately upon passage.
Sponsor: N/A
Type: Act of Parliament
A
BILL
TO
Restructure the Bank of Azalea
BILL
TO
Restructure the Bank of Azalea
1. Short Title
(a) This bill shall be referred to as the "Better Banking Act 2.0".
(b) This bill was authored by Lysander Lyon.
(c) This bill repeals the Better Banking Act.
2. The Bank of Azalea
(a) The Bank of Azalea shall be maintained as an entity that is part of the Azalea Isles government but with distinct autonomy.
(b) The Bank of Azalea shall engage in policy in such a way as to best benefit the citizens of the Azalea Isles in the longer term.
(c) The Bank of Azalea shall have a Chairman of the bank, appointed by the Prime Minister and confirmed by Parliament.
(i) The Chairman of the Bank of Azalea shall be appointed for life.
(ii) The Chairman of the Bank of Azalea may be recalled by Parliament by motion, so long as the motion passes with a majority of Parliament (currently five votes, as that is a majority of nine seats).
(d) The Chairman shall lead the Board of Governors, and which shall have four members total.
(i) Two Governors shall be nominated by the Chairman to Parliament and confirmed by a simple majority of votes cast on their nominations.
(ii) If no vote is held on a Governor’s nomination within 7 days of it being made by the Chairman, the Governor is automatically appointed on the 8th day, and begins the term then. Parliament may later vote to accept or reject the nomination: if rejected, the Governor immediately ceases holding the role, while if accepted, the Governor is simply confirmed, but the term length is still counted from that 8th day.
(iii) The appointed Governors shall serve terms of three months (for example, January 14th through April 14th).
(iv) The fourth member of the Board of Governors shall be the Minister of Economic Affairs, but this role shall be non-voting and shall not count as a position for the Minister’s limit under the Representation in Government Act. The Minister may still participate in debates and has the full rights to see into the bank’s actions as a normal Governor.
(e) Individuals appointed to a vacancy receive a fresh three month timer on their term; that is, if a Governor resigns two months into their term, the appointee to replace the resigned Governor does not only have one month left, but instead has a fresh three months either from Parliament’s confirmation or from the 8th day after the nomination is made, depending on the circumstance.
(f) The Chairman is responsible for breaking any ties, operating the bank, and managing the meetings.
(g) Parliament may give the Bank of Azalea an endowment in their monthly budget, which shall be a sum of money transferred to the Bank of Azalea to assist in its operations.
(h) Each Governor, and the Chairman, must cast their own vote.
(i) The decisions of the Bank of Azalea should be voted on by the Board of Governors, whether they are setting requirements or changing policy or approving loans or any other bank power or function.
3. The Functions of the Bank
(a) The Bank of Azalea may set a minimum reserve requirement for all financial institutions, or by financial institution, which shall be the minimum percentage of deposits the institution is required to reserve, meaning they cannot be lent out or invested.
(i) For example, a 30% reserve requirement means 30% of all client deposits must be held by the bank, and cannot be invested or loaned out,
(b) The Bank of Azalea may set a minimum holdings requirement for all financial institutions, or by financial institution, which shall be the minimum percentage of reserves the institution is required to hold with the Bank of Azalea.
(i) For example, a 30% holdings requirement means that 30% of deposits the institution is required to hold need to be given to the Bank of Azalea for holding. IE, a bank with $100,000 in deposits needs to hold $30,000 in reserve, and $9,000 needs to be given to the Bank of Azalea.
(c) The Bank of Azalea may choose whether it allows institutions to deposit more funds with the Bank of Azalea than required by the minimum holdings requirement. This policy shall be known as the Institutional Deposit Policy.
(i) The Institutional Deposit Policy will be yes, the bank allows deposits in excess of the holdings requirement, or no, it does not.
(d) The Bank of Azalea may set an interest rate it pays out on institutional funds deposited with the bank, and may set a different rate (or a rate of 0%) for funds deposited in excess of the minimum holdings requirement, or in excess of the minimum reserve requirement.
(i) For example, the Bank of Azalea could set a 2% monthly interest rate on funds held within the minimum holdings requirement amount, a 1% monthly interest rate on funds held over the minimum holdings requirement but up to the minimum reserve requirement, and a 0% interest rate on funds over the reserve requirement.
(ii) For a $100,000 bank depositing everything with the Bank of Azalea, and holdings and reserve requirements of 30%, that would look like this: $30,000 would receive 2% interest, $30,000 would receive 1% interest, and $40,000 would receive 0% interest.
(e) The Bank of Azalea can set the time period for reserve updates, which is how often institutions must file a report informing the bank how much money they have in client deposits, and then update the amount of reserves held with the bank if needed.
(f) The Bank of Azalea may issue loans to financial institutions, or to the government, and shall have the power to set the terms on the loan (interest rate, repayment period, collateral, etc.).
(g) The Bank of Azalea shall be granted the authority to regulate financial institutions with policies relating to interest rates, fees, disclosures, and other policies related to the operation of the banking industry.
4. Insurance
(a) Financial institutions may request deposit insurance from the Bank of Azalea, up to a maximum of 20% of deposits and $20,000 per individual.
(b) The Bank of Azalea shall evaluate the institution, and determine a fee to be levied as payment for the coverage.
(i) The fee may be either a monthly flat fee, like a payment of $5,000, or a percentage of profits, like 10% of net income.
(c) Institutions insured by the Bank of Azalea may be audited by the bank at any time, and may have different or additional requirements levied on them, such as a higher reserve requirement or additional informational disclosures to be provided to the Bank of Azalea.
5. Public Notification
(a) The Bank of Azalea’s policies should be accessible in the government agencies Discord server, or upon request in a ticket.
(b) The Bank of Azalea should provide announcements to the public when policies are changed, added, or removed, with a summary of these changes provided at the end of each month, when possible.
(i) Summaries are encouraged to be monthly, but must occur once every two months at minimum.
6. Credit Ratings
(a) The Bank of Azalea shall be tasked with coming up with a credit rating system. Upon the completion of this research and planning, the bank shall propose an amendment to replace this section with the new credit rating legislative foundation.
7. Oversight
(a) Parliament may order an audit of the Bank of Azalea and its operations at any time by simple majority motion, although there must be a minimum two months between the end of one audit and the beginning of another.
Enactment: This Act comes into force immediately upon passage.