Sober Thought banks
Sober Thought's economy depends on pubic and private corporations to offer loans, accept deposits, and facilitate other financial transactions. Otherwise, trade would be dominated by barter and loansharking. However, predatory cheque cashing services like MoneyMart or Western Union are banned and have no place in the economic or social life of the country.
Contents
Central bank
Most real world countries have a central bank, but how this is organised differs greatly over time and by jurisdiction. For instance, the Bank of England was a private venture until taken over by the British government. In this country, the federal government is solely responsible for the Bank of Sober Thought.
The central bank governs monetary policy, prints banknotes and mints coins denominated in Denkmarks, and accepts deposits from and makes loans to provinces and municipalities. It does not accept individual deposits or make individual loans, preferring to rely on tax incentives or loan guarantees to private banks, provincial savings offices or credit unions.
The chief central banker is appointed by the Minister of Community Prosperity upon the advice of the Vice Minister of Economy. The banker is appointed for a fixed term and cannot be removed except for just cause. The banker and the central bank are headquartered in Capital Province, but regional offices exist in the large and economically important cities of Schweindorf, Mont Royaume and Zalevfyerma.
Private banks
The rough and tumble of jostling for large-scale borrowers and depositors is mainly left to the private banks. The legal status of these private banks is identical to that of any other corporation: sole proprietorships are rare for all but the smallest neighbourhood banks, joint stock companies are by far the norm and most of those are limited liability companies as well.
They grease the wheels for (and sometimes palms of) captains of industry, allowing such companies as SIAM to expand their production lines, develop new markets and invest in capital equipment. For small time depositors, they offer a small but regular and risk free return in the form of interest
Since in many respects business is really a confidence game in both the positive and pejorative senses, the national economy cannot afford runs on banks or, worse still, bank failures. In keeping with the theory of full cost accounting enunciated in the article Sober Thought economy, banks are required to pool their resources to insure their deposits. The private banks collectively, through their industry association, assess each private bank individually to establish an appropriate premium based on objective risk factors. The banking association then deposits these premiums with the central bank. The federal government makes up any difference between insurance deposits and insurance claims, but then quickly charges this back to the industry association.
Savings offices
Some provincial as municipal governments operate savings offices or caisses d'épargne, which perform some functions of the central bank and most of the private banks. Obviously, since currency is solely the responsibility of the national government, savings offices cannot issue their own banknotes or specie.
However, they are capable of taking deposits and making loans to subordinate, peer or laterally related governments. For instance, Bristle Island has many provincially chartered or informally devolved areas which need a reliable place to do their government finance operations. The Bristle Island (formerly South Island) Savings Office meets most of these local needs.
Savings offices are also active in the retail and commercial banking sectors. For instance, the Caisse d'épargne de Hochelaga is one of the primary conduits of state-encouraged big business in the province. Ordinary Hochelagais and Hochelagaises consider it a matter of provincial pride to conduct their financial affairs through the provincially owned institution.
Savings offices are not required to have deposit insurance or report to the Bank of Sober Thought on their operations. Instead, they rely on their parent governments for security since a government which goes bankrupt will have far more problems on its hands than a few disgruntled creditors.
Credit unions
While outwardly similar to banks, credit unions or caisses populaires are in fact incorporated cooperatives whose shareholders are the sole depositors and borrowers. In a generally leftwing country like Sober Thought, the ability to avoid contaminating one's self with the taint of economic exploitation is quite appealing. Furthermore, in a place where one effectively has corporate influence over the loan officer, people have a much greater likelihood of getting a loan.
However, a certain amount of risk also attaches to credit unions. They are companies so deposits with them are considered speculative investments rather than a contract for the exchange of money, while on the flip side a loan from them is a binding contract. And because people who cannot secure loans from banks first are more likely to go to credit unions, and put pressure on loan officers when they move, the default rate among borrowing members is higher.
Although credit unions are not obligated to seek deposit insurance, the large majority of them have created a credit union central, a sort of union of credit unions. These offer similar protections to banks, but because membership is not compulsory nor is it always maintain, member depositors would be wise to inspect the status of their local union carefully.
Mortgages and insurance
Private banks, savings offices and credit unions all offer mortgages for real estate and various kinds of insurance. Some companies specialise in one part only of this market.
Mortgages are considered low-risk because mortgagors are the preferential creditors in bankruptcy proceedings and companies can seize control of property whose mortgagors are in default. The laws of economics correctly predict that low risk means low return sector. However, some financial companies operate exclusively in mortgages, either believing that high volume can create profits or using this as a means to become a large landowner when mortgagors default.
For most people, this is the refuge of last resort for home ownership. The pricing and policies are predatory, but sometimes financial circumstances for people into these positions. Once there, many mortgagors move their business to banks, savings offices and credit unions as quickly as possible.
Similarly, various forms of life, health, property and vehicle insurance may be offered by any of the other financial institutions or by a purpose-built assurance company. These companies invest premiums to cover payouts, and are required by law to self-insure through their industry association.
Major institutions
Banks, savings offices and credit unions which are important economically, socially or both are listed below. The first part of the entry is the corporate name, the next the corporate headquarters, the penultimate the legal status and the last the most important types of services offered.
- Bank of Sober Thought/Banque de Pensée sobre, Capital Province, central bank, currency and government
- Bank of Braunekuste, Johnstown, private bank, retail and commercial
- Braunekuste Savings Office/Caisse d'épargne de Braunekuste, Grandville, savings office, retail
- Bank of Jarvet, Kolashek, savings office [sic], all purpose
- Banque de Mont Royaume, Montroy, private bank, commercial and retail
- Bristle Island Savings Office, Drewburgh, savings office, municipal and retail
- Caisse d'épargne de Hochelaga, Hochelaga (Ville), savings office, all purpose
- Caisse nationale, Caguenai, credit union, retail
- Caisse populaire braunekustienne, Moineville, credit union, retail
- Caisse populaire des montagnes, Mont Royaume, credit union, all purpose
- Caisse populaire du nord, Saint-Visage-Osseux, credit union, retail
- Cholmestay Exchange Bank, Zalevfyerma, private bank, commercial and retail
- Cholmestay Savings Branches, Nordentor, savings office, retail
- Commercial Bank of Thuvia, Georgetown, private bank, commercial and retail
- Christian Financial Alliance, Zalevfyerma, private bank, agricultural and retail
- Georgetown Credit Union, Georgetown, credit union, retail
- Georgetown Savings Office, Georgetown, savings office, retail
- KasseJarvet [sic], Kolashek, credit union, all purpose
- Kingsmount Bank, Kingsmount, private bank, all purpose
- Northern Commercial Bank, Georgetown, private bank, commercial
- Pastbeshchye Treasury, Lareine, savings office, all purpose
- Plains Bank, Lesbaies, private bank, agricultural and retail
- National Agricultural Cooperative/Caisse nationale des agricoles, Capital Province, credit union, agricultural
- Peninsular Credit Union, Paidrig, credit union, retail
- Potato Island Savings Office, Princetown, savings office, municipal and retail
- Thuvia Savings and Loan, Chapeauxdix, savings office, municipal and retail
