Free Banking.

[New Hyannis]

What is the status of Free Banking in your nation?

For a definition, Free Banking is a monetary system which subjects banks and credit unions to no more regulations than other business enterprises. Another noteworthy aspect of Free Banking is banks are permitted to issue their own currency notes, subject to basic regulations, as opposed to the notes being issued by the state. In its purest form, Free Banking allows no role for a central bank of any kind, and the "lender of last resort" role does not exist in the traditional sense. The state does not insure banknotes or deposit accounts.

Market forces help to control the system, regulating how many banknotes can be supported by the existing cash reserves, which are traditionally a precious commodity of some kind.

Having read this, what is the status of Free Banking in your nation? Is it in use? If not, was it ever, and does it have any supporters presently?

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In the Commonwealth of New Hyannis, the Free Banking system is the rule. There is very little regulation on banks apart from those placed on other companies. The role of a central bank is filled by a series of competing firms which provide the monetary and banking services required by the populace. They can even issue banknotes. This has led to a series of "Currency Wars," which have brought on a sort of cooperative equilibrium in which banks agree to accept each other's notes at face value in the course of normal business. The only real state interference is law regulating the basic quality of banknotes and services rendered, and an effective state monopoly on the minting of gold and silver coinage, which the banknotes represent and for which they are redeemable.

[Soled]

Outlawed.
All economy-related things are regulated by the Ministry of Money. We have a Central Bank too and foreign banks cannot exist.

[New Hyannis]

Outlawed.
All economy-related things are regulated by the Ministry of Money. We have a Central Bank too and foreign banks cannot exist.

Thank you. Anybody else?

[Deneclia]

Outlawed.
All economy-related things are regulated by the Ministry of Money. We have a Central Bank too and foreign banks cannot exist.

This.

[Anollasia]

Illegal.

[Rejistania]

Rejistania has a Jasika based banking system which does partly base itself on ideas of free banking. There are alternative currencies, but at the same time, a framework of regulations exists.

[Neo Rome Republic]

All Banks within NRR are Nationalized.

[Wolfian State]

Before the State was founded each megacorp issued it's own currency. After the foundation the Directorate was charged with issuing a universal currency of the Wolflands, called units, and did that result in that the megacorp "notes" began disappearing. However those are still valid currency at any bank, and are now the only paper money issued in the state as units are fully digitalised.

[Romanum Sacrum]

Moneylending institutions in the Holy Roman Empire are subject to widespread regulation, at least if they want to qualify for deposit and security insurance. The first point that needs to be stated is that the Empire uses two currencies, the NYD ($) and the Imperial Pound Sterling (£).

Sterling is issued by the Imperial Bank of England (AIA, for Argentia Imperiosa Anglia). The charter of the AIA prevents it from allowing any inflation it is in its power to prevent (which, of course, means that there must sometimes be deflation).

While this might be fine for small transactions and businesses, a government cannot officially operate without being able to expand or contract its money supply, and deflation is very bad for the economy. This is why the Empire has chartered a second Imperial Bank, the Imperial Bank of the Republic of New York (AIRPNE, for Argentia Imperiosa Rei Publici Novi Eboraci), to issue Dollars, which are free floating, and consequently tend to rise against the Pound.

Thus what results is a system which is not unlike bimetallism, which was advocated to give strong- and weak-currency proponents the best of both worlds. Unfortunately, in practice, the opposite occurred—but much of this was due to the inherent problems with using a specie-backed currency. In addition, bad money tended to "chase out" good money, where people would hoard their stronger currency, and dump their weaker currency.

Thus, the Imperial government regulates how these currencies must be used, to ensure that a healthy balance is maintained. Firstly, only the Pound is available in notes—NY$ can only exist on cheques or on ledgers or the like. Secondly, all bank accounts of Sterling over £10,000 (roughly $50,000 RL) must be reported to the AIA, who tax it. In addition, all purchases made with pounds over £1,000 have an additional tax, while purchases made with Dollars underneath the equivalent amount of £1,000 are also taxed. This means that for small purchases, people are forced to use pounds, and are very much encouraged not to hoard them.

So back to bank regulation. Banks are required by law to only lend Dollars, not Pounds. In this way, people are still forced to use NY$ and keep NY$, even though they may prefer to keep pounds.

In addition, Banks must report their financial reserves. There is not a limit to how fractional a bank can be, but all banks are forced to pay Insolvency Insurance, and these rates, to a large extent, are based on how fractional a the bank's reserve is. Because of this insurance, banks are completely covered in case of failure.

Large Banks are also required to bid on securities issued by the AIRPNE on behalf of the Imperial treasury. This is the primary debt-creating mechanism that finances the Imperial government in time of deficit.

[Transoxthraxia]

Free banking is allowed, and promoted in Transoxthraxia.

[Navetia]

The banking industry is more regulated than other industries, considering actions in the industry have great effects on the economy. Furthermore, only the national government may issue currency.

[Yannia]

There used to be free banking, with every city minting its own coins. This changed after the Vassfforcian occupation (which ended in 1802), when states reserved the right to mint coins for themselves. Nowadays, the banking industry is heavily regulated, (to avoid disasters like the recent RL credit crisis,) while, since 1966, only the federal government may issue currency.

[Saurisisia]

Free banking is allowed, and promoted in Transoxthraxia.

This.

[Eurrussia]

Banned in 1983. Most banking belongs to the Government to keep the countries economy more stabled within only 1 Government-controlled bank.

[Victorious Decepticons]

Having read this, what is the status of Free Banking in your nation? Legal, but now dead. It was not replaced with regulations or a central bank. Instead, we use a cash economy.

Is it in use? See above. Of course, if you ask around, you'll find plenty of people who'll pipe up and CLAIM TO have banks you can put your money into. There are also plenty of people willing to sign away their first-built to entice you to loan to them. As for the veracity of the claims? Put it like this, you can put your money IN, but...

The same goes for the loans. Lotsa luck collecting that first-built when his Coder doesn't pay up. He'll just fly away laughing, along with daddy.

If not, was it ever, Yes. We buried it alive under a mountain of corruption within a month. This really isn't the place for any kind of business where you have to just trust someone to not fly away with your money and leave you with nothing but peals of laughter for a receipt. As for why? Put it like this, our name sounds nice and snappy, but that's not the only reason we chose it.

and does it have any supporters presently? Lots of people would love it if suckers would outright hand them money again, and lots of other people would love it if suckers would loan them money again!

Unfortunately, the domestic sucker pool is completely dried up when it comes to the financial sector. We've run every possible banking, loan, stock, and related scam into the ground and then some. Of course, that refers to doing business HERE. We do plenty of banking "business" with other nations, much of it going through the Decepticon Interplanetary Bank.

Yes, we did say we didn't have a central bank. And we don't. But we're certainly smart enough to call our government-run currency counterfeiter, artificial electronic transfer transaction generator, and always-approved credit card acceptance code provider a name that will get half-asleep foreign nations to assume wrongly. Of course, that's not what we officially tell foreigners!

[Ulvena]

Despite Neo-Joseon attempting to give economic freedoms as much as possible, there is a quote that we abide by: "Give a man a gun and he can rob a bank. Give a man a bank and he can rob the world." Or the famous statement given by an American during their rebellion: "Banking establishments are more dangerous than standing armies."

In that sense, we regulate banks. We don't nationalize but we do centralize. We have an Imperial currency, the Yang. The banking industry is heavily monitored and can be audited at any point in time without notice. During the 1998 Dissolution of the UN, Neo-Joseon had several bankers executed or imprisoned for attempting to commit fraudulent behaviors that would've resulted in a credit crash unlike anything seen since the Great Depression. But other than that, bankers can do their own thing and set their own interest rates. The free market can handle anything so long as audits and regulations are in place.

[The Saint James Islands]

The banking industry is more regulated than other industries, considering actions in the industry have great effects on the economy. Furthermore, only the national government may issue currency.

^ This.

[Gristol-Serkonos]

No. The financial system is regulated here in the Sovereign Empire.

Written in GS-42: The Banking Act of 1895, Rev. 2014, the central government, known as the Rieshistagi, has the mandate to monitor and audit banks without notice at any time. The government also creates the currency through the Imperial Central Bank of the Sovereign Empire.

[Bourbon Francia]

Free Banking is not used in France. The central bank (Banque Royale de France) controls the Franc, and banking must follow any regulation that the ministry of the economy, industry, and finance sets.

[The Iberian Peoples]

Outlawed. The Iberian financial sector operates according to the principles of Socialist Finance.

The People's Bank of Iberia acts as the central bank, and has a monopoly on cash printing and currency exchange. Largely it serves the People's Banks of the constituent republics, which dominate the country's finances. They're all socialist property.

The different People's Banks have direct oversight over the Mutual Credit funds of the different producer and consumer cooperatives in the country, the only financial institutions that can operate without being directly owned by the State.

[Davinhia]

The banking industry is more regulated than other industries, considering actions in the industry have great effects on the economy. Furthermore, only the national government may issue currency.

same here

[New Hyannis]

It seems Free Banking is not a widely used system from what has been posted thus far, with less than a handful of present adherents. Anybody else care to contribute?

[Felsinean Valley]

Any form of barter is illegal in Felsinean Valley due to tax evasion troubles, and using "private" currency is considered barter

[Sihlasea]

In the Sihlasean Commonwealth we do not use money. Banks are commonly owned warehouses used to store goods until they are requested by citizens, not repositories for gold or paper.

[United States of The One Percent]

Every branch of government of the US-TOP has a duty to put forth every effort to support the banking and financial sectors. We do not put them (read: Ourselves) to the effort of printing banknotes, insuring deposits or abiding by pesky laws, rules and/or regulations. Whatever is good for the banks is good for Us. All our banks are officially Too Big To Fail; all our bankers and financiers are therefore Too Big To Jail. Whenever they may overlook some fine legal matter, such as price fixing, past-posting, bamboozling investors or defrauding depositors, the worst that might happen is that they pay a small fine, admit to no wrongdoing and promise never, ever to do such a thing again, until the next time anyways. Should they ever screw up enough to threaten the global financial system with collapse, Our response would be to use public funds to set them up for a new bet, giving them unlimited access to untold amounts of same for the purposes of reckless speculation and paying themselves (i.e. Ourselves) large bonuses.

Stick up a corner drugstore in US-TOP and you most likely will go to jail for many, many years. Rob the 99 percent blind and at worst you may have to apologize that you did not exercise enough control over your underlings, some of whom may have to go to jail country club for a couple of years.