Request for feedback on proposal on the Neualtenburg Bank

As per Claude's suggestion, here goes a proposal for a bill for the RA to discuss (and eventually approve). This is just a "bare-bones" approach for the Bank; further bills will probably be required to get a more functional bank operational, but I think we have to start somewhere, so... here it goes!


The Neualtenburg Bank is the central, state-owned bank of
Neualtenburg, created under control and supervision by the Guild, but
operating independently. It is headed by the City Treasurer, and the
Neualtenburg Bank will hold the City's accounts in L$ and US$.

Its functions include:

1. Providing a central accounting system for the whole City's income and paying expenses (including private island monthly fees)
   
2. Emitting and managing City Bonds
   
3. Holding money (in L$ or US$) and assets (land) in escrow for N'burg-incorporated companies
   
4. Emitting certificates and overseeing the operation of private banks incorporatd in N'burg
   
5. Lending money to private banks incorporated in N'burg
   
6. Lending money based on escrows held to N'burg-incorporated companies
   
7. Establishing "safety ratios" for lending money based on escrow-held assets
   
8. Establishing the Neualtenburg interest rate (private banks/companies will loan money based on that nterest rate; private banks, of course, can add their own margins on top of that)
   

Overseeing individual companies' accounting is not a function of the
Bank, however; it's a function of Government; although very likely
it'll be one done by the Guild as well (since they handle all things
financial, anyway)

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For your discussion!

This bill establishes the Neualtenburger Bank, the bank is overseenby the treasurer of the city. The bank is authorized to make payments on behalf of the city and to hold escrow deposits from citizens and Neualtenburg registered companies and corporations.

What about mortgage loans?
Company A owns 5000 sqm of land (you have to decide whetever you accept land as mortgage outside NBurg or not ). They transfer the land to the NBurg Bank (however they keep full rights using it) and receive a credit for lets say 75% of the lands value minus the land tier fee for the loan duration.
If the loan defaults, the NBurg Bank sells the land.


Bonds could be backed up by the NBurg Sim. If the governement defaulted (which I doubt since the bonds can be always refinanced), the sim wouldl be sold and distributed across bonds holders.

I'd leave the mortgaging to private NB banks. I usually don't ask the Fed for a mortgage. Maybe some type of Fannie Mae/Freddie Mac program could be looked at if we ever get that sophisticated.

Lee: Don't worry, I thnk there will be competition among NB private banks for your mortgage dollars.

I am quite satisfied with the Neualtenburger Bank (i. e. "Central Bank" being relegated to a relatively limited role in this embryonic state of legislation. The way I see it is we need the bank as an institution to accept escrow sums in deposit to make way for the new company registration legislation.

I certainly share many of the visions put forward by Gwyneth and others on how this institution can evolve in the future however I find it quite sufficient that we focus in the beginning on developing a framework for company registration and incorporation and let the Neualtenburger Bank remain a skeleton structure for a period while we gain some experience. We can perhaps then use our experience with the incorporation to illuminate a discussion on what should be the policy of the bank in the future. Possibly the treasurer or a person to whom the treasurer chooses to delegate this task could be asked to develop a draft policy for the bank in a more evolved stage. In addition to this and the thoughts put forward by Gwyneth I think the discussion could also profitably draw upon the recommendations put forward in our discussion on a funds management policy for Neualtenburg.

I would like to suggest the following barebones amendment to Claude's legislative stub:

"This bill establishes the Neualtenburger Bank, the bank is overseen by the treasurer of the city. The bank is authorized to make payments on behalf of the city and to hold escrow deposits from citizens and Neualtenburg registered companies and corporations. It will issue notarised certificates to this effect for which a nominal administrative fee will be charged at a tariff set by the treasurer."