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Author: Lysander Lyon, MP
Sponsors: Regyna Allen, Nex Star
Type: Act of Parliament
Preamble: There are multiple issues relating to the Bank of Azalea and the banking system in general within the Azalea Isles. This bill exists to reform that.
1. Short Title and Enactment
(a) This bill shall be referred to as the "Better Banking Act".
(b) This bill was authored by Lysander Lyon, MP.
2. Reason
(a) Restructure the Bank of Azalea.
(b) Require that commercial banks offer loans.
3. Repeal and Supersession
(a) The Financial Stability Act shall be repealed.
(b) All prior legislation regarding the Bank of Azalea shall be superseded by this bill in the event of a conflict.
4. Establishing the Bank
(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 monetary 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 be led by a five member Board of Governors.
(i) One member shall be the Minister of Economic Affairs, or a representative appointed and managed by the Minister to serve on their behalf.
(ii) Four members shall be appointed by the Prime Minister and approved by Parliament.
(d) The appointed members of the Board shall serve four month terms, staggered such that one is up for reappointment every month, with no term limits.
(e) Members can be removed by a two-thirds vote in Parliament.
(i) Any individual appointed to a seat where the prior occupant was removed before the end of their term shall not be given a fresh four months, but shall instead serve out the remainder of the term of the prior occupant.
(ii) If the Board fails in their required duties, the threshold to remove a Governor falls to a simple majority.
(f) The Board of Governors shall internally elect a Chairman, with the spot up for election once each month after a new Governor is appointed due to their term ending.
(i) The prior Chairman shall continue to serve in that role until the new Chairman is selected.
(ii) The Chairman is responsible for managing the meetings of the Bank of Azalea, managing its day-to-day operations, and providing the reports required herein.
(g) Parliament may, when setting budgets each month, set a balance for the Bank of Azalea. The Bank shall be given enough funds to meet this balance, in conjunction with funds held for DTIs in reserve, and excess funds shall be returned to the government balance.
(i) Balance does not mean active cash balance, but total cash, including any loans given out or otherwise.
(ii) The balance cannot be set below the minimum level of cash required to maintain reserves.
(iii) Parliament may, through motion, allow the Bank’s balance to exceed the number set by Parliament for the month through the payment of interest, sale of Azalite, or other revenue-generating activities. This will remain active until Parliament passes a balance for the next month, at which point the Bank must return excess or be given funds so that it meets that balance, unless a motion of exemption is made again.
(h) Each individual on the Board of Governors shall cast their own vote.
5. The Functions of the Bank
(a) The Bank of Azalea will be responsible for collecting and safely storing reserves for all deposit-taking institutions (DTIs).
(b) The Bank of Azalea shall have the power to do the following:
(i) Set the minimum reserve requirement for DTIs, and adjust it as needed.
(ii) Set a minimum portion of reserves that DTIs must hold with the Bank of Azalea, and adjust it as needed.
(iii) Set the interest rate on reserves held at the Bank of Azalea from DTIs, and adjust it as needed.
(iv) Issue requests to Parliament to fund purchases of Azalite and Azalite products.
(v) Adjust the exchange rate of Azalite to Azalean Dollars.
(vi) Adjust the currency support rate, which covers what percentage of the number of dollars in circulation must be backed by Azalite.
(c) The Bank of Azalea shall have the following responsibilities:
(i) Maintain a supply of Azalite that supports the Azalean Dollar’s value.
(ii) Provide reports within three days of the end of each month detailing: the total amount of funds held in reserves with the Bank of Azalea; the amount of Azalite held by the Bank of Azalea; the reserve requirement; the percentage of reserves banks must hold with the Bank of Azalea; the interest rate on reserves held with the Bank of Azalea; the exchange rate for Azalite; the currency support rate; any Azalite purchase requests made to Parliament during the month; and a summary of any changes made to policies contained within this list.
(iii) Notify the public within two days of changing the reserve requirement, the percentage of reserves banks must hold with the Bank of Azalea, the interest rate on reserves held with the Bank of Azalea, the exchange rate for Azalite, or the currency support rate.
(d) Reserves shall be updated at least once each month for DTIs. This means the Bank of Azalea will either request more funds to make sure the set reserve requirement held with the Bank is met, or will return funds if requested because the amount held with the Bank is over the required amount. The procedure for this, as well as choosing to make the updates more than once a month, may be decided by the Board of Governors.
(e) The Bank of Azalea may also set limits on the amount of Azalite it is willing to purchase or sell, on a monthly basis. The purchase price and the sale price may be different, but should not be far apart. Anyone shall be allowed to sell Azalite to and purchase Azalite from the Bank.
6. Additional Functions
(a) The Bank of Azalea shall also have additional powers and responsibilities relating to banking and regulatory functions.
(b) The Bank of Azalea may issue loans, using the reserves held as well as the balance given to it by Parliament, to both investment and commercial banks, and the Azalea Isles government.
(i) The Bank will be responsible for setting interest rates on these loans, and may set up tiered rates.
(c) The Bank of Azalea is granted the authority to regulate banks with policies relating to interest rates, fees, disclosures, and other policies related to the operation of the banking industry.
(d) All policies must be clearly listed in the Bank of Azalea server. This list covers: the minimum reserve requirement; the minimum portion of reserves a DTI must hold with the Bank; the interest rate on reserves held with the Bank; the Azalite exchange rate; the currency support rate; the monthly limit for Azalite purchases/sales; the set interest rates for Bank loans; and all regulatory policies.
7. Oversight
(a) The Bank of Azalea is to be audited quarterly by a Parliament-determined entity.
(b) The Bank of Azalea shall remain under the oversight of a Parliamentary committee, who shall retain the authority to conduct regular hearings, when needed, to ensure the Bank is properly executing its duties.
8. Commercial Banks
(a) All commercial banks must offer loans. A commercial bank may not only serve to take deposits but must have procedures for offering loans.
(i) An individual must be reasonably able to get a loan. It should not be impossible for anyone to get a loan from the bank.
Enactment: This Act comes into force immediately after passage.
Sponsors: Regyna Allen, Nex Star
Type: Act of Parliament
A
BILL
TO
Reform the Banking System of Azalea
BILL
TO
Reform the Banking System of Azalea
Preamble: There are multiple issues relating to the Bank of Azalea and the banking system in general within the Azalea Isles. This bill exists to reform that.
1. Short Title and Enactment
(a) This bill shall be referred to as the "Better Banking Act".
(b) This bill was authored by Lysander Lyon, MP.
2. Reason
(a) Restructure the Bank of Azalea.
(b) Require that commercial banks offer loans.
3. Repeal and Supersession
(a) The Financial Stability Act shall be repealed.
(b) All prior legislation regarding the Bank of Azalea shall be superseded by this bill in the event of a conflict.
4. Establishing the Bank
(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 monetary 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 be led by a five member Board of Governors.
(i) One member shall be the Minister of Economic Affairs, or a representative appointed and managed by the Minister to serve on their behalf.
(ii) Four members shall be appointed by the Prime Minister and approved by Parliament.
(d) The appointed members of the Board shall serve four month terms, staggered such that one is up for reappointment every month, with no term limits.
(e) Members can be removed by a two-thirds vote in Parliament.
(i) Any individual appointed to a seat where the prior occupant was removed before the end of their term shall not be given a fresh four months, but shall instead serve out the remainder of the term of the prior occupant.
(ii) If the Board fails in their required duties, the threshold to remove a Governor falls to a simple majority.
(f) The Board of Governors shall internally elect a Chairman, with the spot up for election once each month after a new Governor is appointed due to their term ending.
(i) The prior Chairman shall continue to serve in that role until the new Chairman is selected.
(ii) The Chairman is responsible for managing the meetings of the Bank of Azalea, managing its day-to-day operations, and providing the reports required herein.
(g) Parliament may, when setting budgets each month, set a balance for the Bank of Azalea. The Bank shall be given enough funds to meet this balance, in conjunction with funds held for DTIs in reserve, and excess funds shall be returned to the government balance.
(i) Balance does not mean active cash balance, but total cash, including any loans given out or otherwise.
(ii) The balance cannot be set below the minimum level of cash required to maintain reserves.
(iii) Parliament may, through motion, allow the Bank’s balance to exceed the number set by Parliament for the month through the payment of interest, sale of Azalite, or other revenue-generating activities. This will remain active until Parliament passes a balance for the next month, at which point the Bank must return excess or be given funds so that it meets that balance, unless a motion of exemption is made again.
(h) Each individual on the Board of Governors shall cast their own vote.
5. The Functions of the Bank
(a) The Bank of Azalea will be responsible for collecting and safely storing reserves for all deposit-taking institutions (DTIs).
(b) The Bank of Azalea shall have the power to do the following:
(i) Set the minimum reserve requirement for DTIs, and adjust it as needed.
(ii) Set a minimum portion of reserves that DTIs must hold with the Bank of Azalea, and adjust it as needed.
(iii) Set the interest rate on reserves held at the Bank of Azalea from DTIs, and adjust it as needed.
(iv) Issue requests to Parliament to fund purchases of Azalite and Azalite products.
(v) Adjust the exchange rate of Azalite to Azalean Dollars.
(vi) Adjust the currency support rate, which covers what percentage of the number of dollars in circulation must be backed by Azalite.
(c) The Bank of Azalea shall have the following responsibilities:
(i) Maintain a supply of Azalite that supports the Azalean Dollar’s value.
(ii) Provide reports within three days of the end of each month detailing: the total amount of funds held in reserves with the Bank of Azalea; the amount of Azalite held by the Bank of Azalea; the reserve requirement; the percentage of reserves banks must hold with the Bank of Azalea; the interest rate on reserves held with the Bank of Azalea; the exchange rate for Azalite; the currency support rate; any Azalite purchase requests made to Parliament during the month; and a summary of any changes made to policies contained within this list.
(iii) Notify the public within two days of changing the reserve requirement, the percentage of reserves banks must hold with the Bank of Azalea, the interest rate on reserves held with the Bank of Azalea, the exchange rate for Azalite, or the currency support rate.
(d) Reserves shall be updated at least once each month for DTIs. This means the Bank of Azalea will either request more funds to make sure the set reserve requirement held with the Bank is met, or will return funds if requested because the amount held with the Bank is over the required amount. The procedure for this, as well as choosing to make the updates more than once a month, may be decided by the Board of Governors.
(e) The Bank of Azalea may also set limits on the amount of Azalite it is willing to purchase or sell, on a monthly basis. The purchase price and the sale price may be different, but should not be far apart. Anyone shall be allowed to sell Azalite to and purchase Azalite from the Bank.
6. Additional Functions
(a) The Bank of Azalea shall also have additional powers and responsibilities relating to banking and regulatory functions.
(b) The Bank of Azalea may issue loans, using the reserves held as well as the balance given to it by Parliament, to both investment and commercial banks, and the Azalea Isles government.
(i) The Bank will be responsible for setting interest rates on these loans, and may set up tiered rates.
(c) The Bank of Azalea is granted the authority to regulate banks with policies relating to interest rates, fees, disclosures, and other policies related to the operation of the banking industry.
(d) All policies must be clearly listed in the Bank of Azalea server. This list covers: the minimum reserve requirement; the minimum portion of reserves a DTI must hold with the Bank; the interest rate on reserves held with the Bank; the Azalite exchange rate; the currency support rate; the monthly limit for Azalite purchases/sales; the set interest rates for Bank loans; and all regulatory policies.
7. Oversight
(a) The Bank of Azalea is to be audited quarterly by a Parliament-determined entity.
(b) The Bank of Azalea shall remain under the oversight of a Parliamentary committee, who shall retain the authority to conduct regular hearings, when needed, to ensure the Bank is properly executing its duties.
8. Commercial Banks
(a) All commercial banks must offer loans. A commercial bank may not only serve to take deposits but must have procedures for offering loans.
(i) An individual must be reasonably able to get a loan. It should not be impossible for anyone to get a loan from the bank.
Enactment: This Act comes into force immediately after passage.
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