Packilvanian Central Bank
The Packilvanian Central Bank (Packilvanian: luMonaat luShahishme aBakhilfaniya) is one of the most powerful central banks on Urth alongside the Auroran Central Bank of the United Nations of the Auroran Continent, and the Concordian Reserve Bank of the United Confederation of Concordian States. It supervises banking in Packilvania, issues the Packilvanian dinar and controls monetary policy.
It was first founded in 1921 after the Packilvanian Communist Party under Gideon Muktan overthrew the Demirite dynasty under Sultana Zerah Demir IV during the First Packilvanian Civil War. The Provincial Banks were nationalised and amalgamated to form the Packilvanian Central Bank. Even after the Carriers of Mercy under Sultan Amhoud I deposed the Communist Party and established the rule of the Bedonite dynasty over Packilvania, the Bank remained largely unchanged. It is seated in Bingol and its incumbent governor is Dr Uramid Nekhal.
Under the Demirite dynasty, starting in 1838 on the decree of Sultan Jahel, the Provincial Banks were established. Each province in Packilvania had one Provincial Bank. Their function was to issue Packilvanian dinar notes and coins, and to act as the banker of the state. They did not provide commercial banking services for the public but acted as a lender of last resort to other banks within their province. Packilvanian dinar currency was exchangeable at par at any other Provincial Bank. These Provincial Banks were owned by the commercial and investment banks that were located in the province of that bank. This system helped to eliminate the inefficiencies of local banks issuing their own currency.
Members of the nobility of Packilvania, wealthy oil and rail tycoons, and the Imperial family owned shares in many of the local banks as economic power and wealth concentrated in the hands of a small part of the population. 7 banks arose which, through mergers and acquisitions as well as natural growth, controlled a substantial portion of the market share and subsequently inherited substantial shares and the concomitant voting rights that allowed the decisions of the Provincial Banks to be controlled by fewer people.
This caused the Provincial Banks to adopt practices favourable to the largest banks. This led to wild variations in asset and consumer prices across provinces that threatened the stability of the Packilvanian banking system and the welfare of the country. Thus, the Imperial Banking Commission was created in 1879 under Sultan Ishak V to regulate the Provincial Banks and the banks under them. With the outbreak of the Great War in 1914, the government under Sultana Zerah Demir IV often suspended the convertibility of dinars into gold and instructed the Imperial Banking Commission to order banks to suspend the issuance of gold to the public. Coupled with the strain on the economy that was created by the war, this prompted bank runs and higher inflation.
Packilvanian Communist Party
Gideon Muktan, the leader of the Feline-only caucus in the Parliament of Packilvania, made impassioned speeches calling for the government to stop the war and improve the management of the national currency to stabilise inflation and provide Packilvanians with financial stability. His requests were often ignored. The Feline Club was renamed as the Packilvanian Communist Party and after securing the loyalty of Feline soldiers who were tired of the war and the incompetent management of the financial system by the state, led a civil war against the government. After the passing of the Charter of the People's Republic of Packilvania (luKharta aluJumhuriyat ameShabil aBakhilfaniya), the National People's Congress of Packilvania began reforming the banking sector which culminated in the nationalisation of the Provincial Banks and their amalgamation into the Packilvanian Central Bank through the Banking Reform Law of 1926 (luKhanon aluTawahal aleMonaat).
The powers of regulation that were in the hands of the Imperial Banking Commission were transferred to the PCB and the IBC was abolished. Many IBC members joined the PCP and retained their jobs as banking regulators. The PCB managed to stabilise the banking system and restore the reliable convertibility of currency to gold. The bank was largely able to maintain the stability of inflation for many years. In the 1970s, the country faced an economic recession following the collapse of commodity prices and restrictions on imports of manufactured goods and foodstuffs by other nations. It created certificates that allowed people to get access to foreign hard currency at government determined rates. A black market for foreign liquidity emerged that caused high real inflation figures. This economic crisis coupled with the rise of a militant and religiously aligned faction in the Packilvanian Communist Party sparked the Second Packilvanian Civil War.
When Thawahal Yaladir was arrested and executed following his use of nuclear weapons on Asmalan, a town in Iganar, the Acting General Secretary of the Packilvanian Communist Party, Iman Erdahin, surrendered. The Carriers of Mercy elected to leave the Packilvanian Central Bank largely untouched and opted to implement structures and rules that protected its independence. In 2010, following the Tasselvalta War, the PCB absorbed the Tasselvaltan People's Revolutionary Reserve Bank and extended its jurisdiction to former Tasselvalta.
Powers and duties
The Packilvanian Central Bank has the following powers and duties:
- Monitors and reports the health of the banking system.
- Sets minimum reserve requirements for banks.
- Issues regulations pertaining to governance at banks.
- Advises the government on the oversight of banking, trade, fiscal policy, and the economy.
- Issues the national currency.
- Acts as a lender of last resort to commercial banks.
- Acts as the banker of the government
- Manages and maintains the foreign exchange and precious metal reserves of the country.
- Sells and buys bonds and other financial instruments to regulate the supply of currency.
The Governor of the Packilvanian Central Bank is Dr Uramid Nekhal. He was the COO of the Agricultural Bank of Packilvania in 2007 and was appointed to the PCB in 2008 and has been at the head of the organisation since. He studied a Bachelor's degree in Finance and Mathematics at the University of Bingol and studied a Master's degree in International Finance at the Royal Bursil University in Sani Bursil, Great Morstaybishlia. He completed his doctoral thesis which was entitled "Models for Underwriting Mortgage-backed Securities in Developing Markets" at the University of Lambertupol, in Lambertupol, Caltharus.
He joined the Investment Analysis Team at the Fidakar Public Servants Pension Fund and was appointed as a non-executive board member of the Industrial and Commercial Bank of Packilvania. He became the Head of the Risk and Compliance Department of the Export-Import Bank of Packilvania and subsequently became the COO of the Agricultural Bank of Packilvania. He was nominated as the candidate for the governorship of the PCB after an extensive round of interviews held by the Committee for Finance of the Parliament of Packilvania and appointed by Sultan Namdun III.
The other structures are the:
- Monetary Policy Committee which consists of the Governor and Deputy Governors. It determines monetary policy such as the repo rate.
- Imperial Mint creates coins and gold and silver bullion, and manages the country's gold reserves.
- Packilvanian Security Printing Corporation which prints banknotes
- Packilvanian Currency Exchange Bureau facilitates and oversees capital controls and convertability of the Packilvanian dinar.