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[DRAFT] THE SECURITIES AND INVESTMENTS LIMITATIONS ACT

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Imperium Anglorum
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Postby Imperium Anglorum » Mon Sep 09, 2019 11:43 pm

Attempted Socialism wrote:This scenario is what is being prohibited, which is why I am convinced you're misreading the proposal:
A is the investment division of MegaBank. B is the commercial part. Under the two clauses, if A dominates (Over 55%), A and B must be split.

What provision prohibits that? All I see from the first operative clause are provisions which would prohibit any financial institution from conducting any business in bank B unless banks B and R merge. When I read—

THE GENERAL ASSEMBLY IS THUS FURTHER RESOLVED;

- that, henceforth, no investment; act, trade, advice or other related action, may be given or carried out at any financial institution within a Member Nation which, in the normal course of business,earns forty-five percent or more of its net income per fiscal year, from products, services, et.al located within the commercial banking sector.

- that henceforth, no commercial; act, trade, advice or other related action, may be given or carried out at any financial institution within a Member Nation which, in the normal course of business,earns forty-five percent or more of its net income per fiscal year, from products, services, et.al located within the investment banking sector.

I see (1) no activities can be carried out at any financial institution which earns more than 45 pc of its accounting profit from commercial banking and (2) no activities can be carried out at any financial institution which earns more than 45 pc of its accounting profit from investment banking.

That doesn't require a splitting of the two activities. If you split the activities, a pure commercial bank "R" would earn 100 pc of its accounting profit from commercial banking activities and be prohibited from doing any transactions. The sort of bad and overly broad Glass-Steagall regulations that you think happen, if actualised, would force every single institution out of business.

What the proposal catalyses is the dilution of the net income reported the consolidated position of a commercial bank... with non-commercial-bank activities.
Last edited by Imperium Anglorum on Mon Sep 09, 2019 11:48 pm, edited 1 time in total.

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Attempted Socialism
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Postby Attempted Socialism » Tue Sep 10, 2019 1:06 am

Imperium Anglorum wrote:
Attempted Socialism wrote:This scenario is what is being prohibited, which is why I am convinced you're misreading the proposal:
A is the investment division of MegaBank. B is the commercial part. Under the two clauses, if A dominates (Over 55%), A and B must be split.

What provision prohibits that? All I see from the first operative clause are provisions which would prohibit any financial institution from conducting any business in bank B unless banks B and R merge. When I read—

THE GENERAL ASSEMBLY IS THUS FURTHER RESOLVED;

- that, henceforth, no investment; act, trade, advice or other related action, may be given or carried out at any financial institution within a Member Nation which, in the normal course of business,earns forty-five percent or more of its net income per fiscal year, from products, services, et.al located within the commercial banking sector.

- that henceforth, no commercial; act, trade, advice or other related action, may be given or carried out at any financial institution within a Member Nation which, in the normal course of business,earns forty-five percent or more of its net income per fiscal year, from products, services, et.al located within the investment banking sector.

I see (1) no activities can be carried out at any financial institution which earns more than 45 pc of its accounting profit from commercial banking and (2) no activities can be carried out at any financial institution which earns more than 45 pc of its accounting profit from investment banking.
Okay, I think I see where the issue is. In (1), no investment activities can be carried out, and in (2), no commercial can be carried out (Even though it's excessively clunky in wording): As I have underlined above, the clauses mirror each other in this regard. This in effect bans any overlap between commercial and investment banks that is not basically 45-45 (With 10% coming from... who knows where). Thus, a bank that is predominantly one or the other cannot transfer risks into the other sector, because it is disallowed from engaging in that other sector.

The purpose, as laid out by the OP, is to disentangle investment and commercial banking, not prohibit banks from earning above 90% of their profits from their primary enterprises. As I hope I have made clear, your original assessment is based on a misunderstanding of the text, though that is of course a separate point of criticism of the language used.
IIRC Glass-Steagal forbade any mixing of investment and commcercial banking enterprises? Such that one part of the bank could default without transferring the shock into the other part?

And just to reiterate, it's not because I'm for the proposal. I just think your criticism is based on a misreading of it.


Edit: And I know I messed up the percentages in the comment you quoted above. Like some Pokemons, I'm susceptible to confusion, which this draft provides plenty of.
Last edited by Attempted Socialism on Tue Sep 10, 2019 1:08 am, edited 1 time in total.


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Imperium Anglorum
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Postby Imperium Anglorum » Tue Sep 10, 2019 2:43 am

I can see where you're coming from. But, I don't see much of a difference between commercial activities and investment activities as activities given the definition at the top. They are different sectors of banking, but that is a specialised term which doesn't follow the idea that an investment is anything that accrues value. Insofar as the definition at the top fo the proposal applies, the word "investment" in "investment banking activities" no longer means what we expect it to mean. Instead, it means anything that accrues value.

However, if you take the meaning to be that (1) no investment activities can be carried out in 45+ pc net income commercial banking firm and (2) no commercial activities can be carried out in 45+ pc net income investment banking firm, where the terms refer to sectors, your advocacy would definitely be the case.

Regarding Glass-Steagall: the Banking Act of 1933 would have effectively prohibited the mixing of investment and commercial banking. The point of that is so, losses from the investment sector would not also directly force liabilities on the retail division. Such a structure can be criticised however, for significantly disadvantaging investment bank customers, because they have no recourse if the investment bank fails.
Last edited by Imperium Anglorum on Tue Sep 10, 2019 8:26 am, edited 4 times in total.

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Desmosthenes and Burke
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Postby Desmosthenes and Burke » Tue Sep 10, 2019 6:03 am

Adriatican wrote:INVESTMENT; an asset or item acquired with the goal of generating income or appreciation.


OOC Post:

I am sure IA will correct me if I am wrong, but this definition of investment seems amazingly, horrifically, flat out ridiculously over-inclusive. Using this definition, I do not know if I can name a single bank or credit union serving the general public that does not derive the majority of its income from investments so defined, even Islamic banks which cannot charge interest. Banks for which I am familiar (Credite Suisse, BNP Paribas, Crédit Agricole, Navy Federal Credit Union, and, forgive my desire to vomit, Bank of America, all use interest bearing loans (mortgages, automobiles, personal loans, student loans where permitted/relevant) as their largest source of income. Issuing credit cards (or other lines of credit), and holding government securities (treasury bills or government bonds) as secondary reserves would also seem to qualify as an investment. It is not altogether clear that required reserves in a central bank that earn interest would not count (at least under what I think is the common understanding of the word asset) despite being literally required by law.

That is despite all of those activities being the domain of what (at least in France) would be the standard commercial banking industry (and I assume, thanks to the EU it is the same through most of Europe, and probably North America as well if only because our banking systems seem pretty compatible in general). Perhaps the author could use a more specific definition? Or a better solution might be to remove the clause altogether and define commercial and investment banking and then start drawing lines between them, instead of the present monstrosity that shows less financial literacy than I have (and I regularly cannot understand what IA thinks is basic finance).

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Attempted Socialism
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Postby Attempted Socialism » Tue Sep 10, 2019 7:08 am

Imperium Anglorum wrote:I can see where you're coming from. But, I don't see much of a difference between commercial activities and investment activities as activities given the definition at the top. They are different sectors of banking, but that is a specialised term which doesn't follow the idea that an investment is anything that accrues value. Insofar as the definition at the top fo the proposal applies, the word "investment" in "investment banking" no longer means what we expect it to mean. Instead, it means anything that accrues value.
I guess I skipped over that definition too fast. With that, most of the proposal becomes (Literally) nonsense.

However, if you take the meaning to be that (1) no investment activities can be carried out in 45+ pc net income commercial banking firm and (2) no commercial activities can be carried out in 45+ pc net income investment banking firm, where the terms refer to sectors, your advocacy would definitely be the case.
This was what I was getting at before, yes. If you read it with authorial intent in mind, that's clearly what was supposed to happen.

Regarding Glass-Steagall: the Banking Act of 1933 would have effectively prohibited the mixing of investment and commercial banking. The point of that is so, losses from the investment sector would not also directly force liabilities on the retail division. Such a structure can be criticised however, for significantly disadvantaging investment bank customers, because they have no recourse if the investment bank fails.
As a Bearded Marxist™, I'm heavily into disadvantaging investors. Here, though, I mostly drew on the superficial similarity in end-goal between Glass-Steagal and the draft at hand.


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Kenmoria
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Postby Kenmoria » Tue Sep 10, 2019 11:00 am

(OOC: Are you going to fix the standardise the formatting with other proposals?)
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Araraukar
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Postby Araraukar » Tue Sep 10, 2019 11:17 am

Desmosthenes and Burke wrote:
Adriatican wrote:INVESTMENT; an asset or item acquired with the goal of generating income or appreciation.

this definition of investment seems amazingly, horrifically, flat out ridiculously over-inclusive.

OOC: Owning a flat and renting it to others, definitely would count... but then those are actually called investment apartments (well, directly translated from Finnish).
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Liberimery
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Postby Liberimery » Wed Sep 11, 2019 7:25 pm

Araraukar wrote:
Desmosthenes and Burke wrote:this definition of investment seems amazingly, horrifically, flat out ridiculously over-inclusive.

OOC: Owning a flat and renting it to others, definitely would count... but then those are actually called investment apartments (well, directly translated from Finnish).


I mean has he even watched Shark Tank/Dragon’s Den/Aggressive Animal’s Abode (Show gets names differently depending on broadcast region). That’s how many businesses start, the owner pitches the concept of the product and projected revenue, an investor buys in with a certain price for stake, and when they are paid out for the options once the company grows, and the owner buys back the stake at the price of the percent of shares after the company opts out. Without this kind of investment, economies stagnate or fall apart.

OOC: I’m not aware of the term in American English. Usually apartments are multi-family dwellings and the landlord may own the complex of apartment units or is charging rent for a small portion of space in single family dwelling. The former is usually not a commercial operation and will use the rent to supplement income or pay off the mortgage of the house (in that case, the rent may pay monthly mortgage completely.).

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Imperium Anglorum
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Postby Imperium Anglorum » Wed Sep 11, 2019 8:51 pm

Do you mean subletting?

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Wayneactia
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Postby Wayneactia » Fri Sep 13, 2019 6:52 pm

As not to threadjack I.A.'s thread any further.

viewtopic.php?p=36218489#p36218489

Imperium Anglorum wrote:
Wayneactia wrote:Is mentioning delegates in any way shape of form metagaming or not? It is relevant to the legality of this draft.

To address this, the current GenSec consensus is that mentioning delegates is fine if it can be interpreted as referring to delegates as in the context "delegates to the United Nations today voted on..."


Yet,

Bananaistan wrote:OOC: This was submitted, I've marked it illegal as follows:
Proposal basics (proposals must be written as the laws they become - the first sentence sets the whole up as a proposal); Metagaming ("bicameral nature of the World Assembly" and "Delegates" appear to be references to the Security Council and WA delegates - these cannot be mentioned in proposals)


"BE IT KNOWN; that this Proposal shall be submitted for the consideration of all Delegates, present in membership of the General Chamber of the World Assembly on this day SATURDAY, SEPTEMBER 07, 2019, and shall henceforth be entitled as follows; “THE SECURITIES AND INVESTMENTS LIMITATIONS ACT”."


Nowhere is the Security Council mentioned, and nowhere can it be inferred that the author is mentioning game side delegates, as opposed to in-character delegates. Unless of course supposition is now a reason to declare a proposal illegal?

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Liberimery
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Postby Liberimery » Fri Sep 13, 2019 7:54 pm

Wayneactia wrote:As not to threadjack I.A.'s thread any further.

viewtopic.php?p=36218489#p36218489

Imperium Anglorum wrote:To address this, the current GenSec consensus is that mentioning delegates is fine if it can be interpreted as referring to delegates as in the context "delegates to the United Nations today voted on..."


Yet,

Bananaistan wrote:OOC: This was submitted, I've marked it illegal as follows:




Nowhere is the Security Council mentioned, and nowhere can it be inferred that the author is mentioning game side delegates, as opposed to in-character delegates. Unless of course supposition is now a reason to declare a proposal illegal?



You are aware that one can edit their draft, especially when a Gensec tells them something is in the draft that makes it illegal. The Security Council was mentioned in the original posting of the proposals. I saw it. I saw it when Gensec posted that. As much as it pains me to say this, this time I have to say Gensec isn’t pulling rules out of their ass.

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Imperium Anglorum
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Postby Imperium Anglorum » Sat Sep 14, 2019 4:16 am


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Wayneactia
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Postby Wayneactia » Sat Sep 14, 2019 5:06 am

Imperium Anglorum wrote:Original submission: http://ifly6.no-ip.org/wa-proposal/adri ... 567913770/


Thank you very much I.A. This is exactly what I was looking for.

Bananaistan wrote:OOC: This was submitted, I've marked it illegal as follows:
Proposal basics (proposals must be written as the laws they become - the first sentence sets the whole up as a proposal); Metagaming ("bicameral nature of the World Assembly" and "Delegates" appear to be references to the Security Council and WA delegates - these cannot be mentioned in proposals)


Usually we recommend much drafting. In this case I struggle to see any justification for the huge intrusion into normal banking and investment practices. I can't see this passing in any form. Please offer some sort of justification for these seemingly random limits and why someone shouldn't be entitled to sell 100% of something they own. I'd also suggest a complete rewording, simple English is your friend. Most people will look at this say it's nonsense without trying to parse through your unnecessarily obtuse wording.


Bananaistan please highlight for me in that proposal where the security council or the word "bicameral" even remotely appears.

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Bananaistan
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Postby Bananaistan » Sat Sep 14, 2019 5:15 am

OOC: Read IA's link. Ctrl+F is your friend.
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Wayneactia
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Postby Wayneactia » Sat Sep 14, 2019 5:18 am

I withdraw my complaint.
Last edited by Wayneactia on Sat Sep 14, 2019 5:19 am, edited 1 time in total.

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Araraukar
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Postby Araraukar » Sat Sep 14, 2019 9:27 am

Liberimery wrote:
Araraukar wrote:investment apartments (well, directly translated from Finnish).

OOC: I’m not aware of the term in American English. Usually apartments are multi-family dwellings and the landlord may own the complex of apartment units or is charging rent for a small portion of space in single family dwelling. The former is usually not a commercial operation and will use the rent to supplement income or pay off the mortgage of the house (in that case, the rent may pay monthly mortgage completely.).

OOC: "Apartment building" should really be "apartments building", as an apartment is one unit (a home) in the building. To my knowledge "apartment" is literally "a partment", meaning splitting bigger homes into smaller units to make it possible to have more homes (and thus more rent-payers) in the same building. Which happened around industrialization (timing varies from nation to nation), and when new buildings were built with smaller homes in them, they were still called apartments, despite not being split from larger units. British English often uses "flat", but in USA in my experience that refers to a much more specific thing than just any apartment. Or maybe times have changed from when I learned the difference 15 years ago...

The Finnish word for apartment/flat/living unit in a bigger building is "asunto", which would nuance-translate into "place you live in", and different kinds of asunto are usually referred to in terms of how many people are supposed to live in them, with "yksiö" ("onesie", basically) meaning single-person apartment, "kaksio" ("twosie") for two-person, "kolmio" ("threesie", not to be confused by "kolmio" for "triangle) for three, "neliö" ("foursie", not to be confused by "neliö" for "square") for four, and anything bigger is... well, unheard of, pretty much, in an apartment building. (And since bigger types usually have higher rents, you'll have apartment owners calling large yksiö a kaksio just to justify higher price. A typical yksiö is around 30 square metres, and it's more or less double that for a kaksio, but then it gets more complicated, because the jump from yksiö to kaksio usually includes a proper kitchen being added, with yksiö usually being a single room plus bathroom and kitchen "closet" (too small to take steps inside it).)

For example, my current place is 42 or 43 square metres (I forget which exactly), was marketed as "a large yksiö or small kaksio", has a bedroom and living room (and of course bathroom and a tiny entry hall with space to put your outdoors clothes in), and a kitchen corner separated by a counter from the rest of the living room (which setting I absolutely love and which was largely the reason I wanted it).

EDIT: Subletting would be having someone renting a single room in an apartment, usually but not always someone else having the proper rent contract with the apartment owner. Could have several renters with separate contracts, each paying their part of the whole rent.

Oh and Dragon's Den is called Leijonanluola over here, which directly translates to Lion's Cave. :lol:
Last edited by Araraukar on Sat Sep 14, 2019 9:32 am, edited 1 time in total.
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Giovenith wrote:And sorry hun, if you were looking for a forum site where nobody argued, you've come to wrong one.
Araraukar wrote:
Blueflarst wrote:a cosmopolitan hammer
United Massachusetts wrote:Can we all call ourselves "cosmopolitan hammers"?
Us cosmopolitan hammers
Can teach some manners
Often sorely lacking
Hence us attacking
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Liberimery
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Postby Liberimery » Mon Sep 16, 2019 6:23 pm

OOC: The term "Flat" in American English usually means "smooth area surface" and isn't usually used as a noun at all. Apartment is used to describe just about any non-house situation... Or Condominium, which is owned like a house, but spaced like an apartment... I've never heard "Flat" used as it is in British English. To be fair, both Englishes are well aware of each other's weird turn of phrases, so that could be the reason and America is a pretty big place, and prone to it's own internal bizzare turn of phrases (like what do we call a carbonated beverage. Depending on the part of the country, it's either "soda", "pop", or "coke" (as a generic term. Asking for a coke and getting a Sprite, or a Mountain Dew (owned by Pepsi) or a Pepsi is perfectly expected), and usually its a war between Soda and Pop with Coke being a Kingmaker in the war.

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