From OpenSourceSoftwarePractice

Stub page for the banks.

Contents 1 Group Members 2 Concept 2.1 Competition 2.2 Loans 2.3 Stock Markets 2.3.1 Option 1 2.3.2 Option 2 2.4 Commodity Markets

Group Members

• Will McCarley

Who else?

Concept

An economy requires banks to provide credit to consumers. The base rate at which money is lent between banks is determined by the Federal Reserve. As far as the monetary trading system, the banks might appear as individuals to the Federal Reserve money exchange system. That is not to say that the Fed will not know who the banks are, but to say that the banks use the exact same security protocols as individuals when exchanging currency.

Competition

Competition in the banking sector is essential. Competition keeps interest rates low, which fuels the economy.

Loans

The banks must provide loans to consumers. A collection system must be devised, as well as a mechanism for debt collection in the absence of payment. The competition in the market should keep the interest rates low. The banks pay fees to the FDIC as a form of insurance in case of collapse or a concerted effort to withdraw large sums of money from the bank. Furthermore, the FDIC will set the percentage of funds that must be kept liquid in order to guarantee the banks solvency.

Stock Markets

Option 1

A stock market can be simulated in the absence of a market listing company by listing the shares directly with the banks. Thus essentially each bank would be it's own stock exchange as well.

Option 2

Rather than trading shares of a company, the bank can sell shares of the loan directly to consumers. In this system, price movement in the shares directly correlates with the size of the companies' credit line.

Commodity Markets

These are of no use unless there is competition in the raw materials markets.