View source for The SimDemocracy Reserve System Act

[[Category: Legislation]] [[Category: Economic Law]]
=Preamble=
'''WHEREAS;''' a stable and independent monetary authority is essential for price stability, full employment, and a secure financial system.

'''WHEREAS;''' it is deemed necessary to establish a central bank that is insulated from short-term political pressures and reflective of the nation’s specific economic needs.

=The SimDemocracy Reserve System Act=
==Article I: Definitions==


§ 1 “Central Bank” shall refer to the SimDemocracy Reserve System (SRS), which is the nation’s independent monetary authority.

§ 2 “Board of Governors”shall refer to the governing body responsible for formulating and implementing national monetary policy.

§ 3 “Monetary policy instruments” shall refer to tools including, but not limited to, interest rate adjustments, open market operations, and reserve requirements used to influence economic conditions.

§ 4 “Financial institutions” shall refer to any business or organization that deals with financial activities such as lending, borrowing, or investing.

==Article II: Establishment and Mandate of the SimDemocracy Reserve System==


§ 1 The SimDemocracy Reserve System (SRS) is hereby established as an independent central bank vested with the authority to conduct and supervise monetary policy for SimDemocracy.

§ 2 The mandate of the SRS will be the following:
 	§ 2.1 To maintain price stability and control inflation.
 	§ 2.2 To promote maximum sustainable employment.
 	§ 2.3To ensure the stability of the financial system and support economic growth.
==Article III The Board Of Governors==

§ 1 The Board of Governors shall consist of three (3) members, the Secretary of the Treasury, Deputy Secretary of the Treasury, and Treasurer.

§ 2 The Treasury Secretary shall serve the board as the Chair, and the Deputy Secretary as the Vice Chair.

§ 3 The duties and responsibilities of the Board of Governors will be the following:
 	§ 3.1 To formulate, implement, and oversee national monetary policy.
 	§ 3.2 To regulate and supervise financial institutions.
 	§ 3.3 To set key policy instruments including interest rates and reserve 		requirements.
 	§ 3.4 To regularly exchange information, ideas, and document policy decisions along with supporting economic analyses. 
==Article IV Monetary Policy Framework and Instruments==

§ 1 The SRS shall use its monetary policy instruments to maintain price stability, support full employment, and moderate long-term interest rates.

§ 2 The SRS shall adjust short-term interest rates to influence economic activity.

§ 3 The SRS is authorized to buy and sell government securities to regulate the money supply and liquidity.

§ 4 The SRS shall set minimum reserve ratios for banks and other depository institutions.

§ 5 The SRS may provide short-term loans to financial institutions in distress to ensure stability.

§ 6 The Board of Governors shall meet at least weekly to review economic indicators and adjust policy as needed.

§ 7 Economic forecasts, research findings, and policy rationales shall be documented and made publicly available, subject to national security and confidentiality constraints.


==Article V: Independence, Accountability, and Transparency==

§ 1 The SRS shall operate independently of the political executive and legislative influences to ensure that its monetary policy decisions remain free from short-term political pressures.

§ 2 The SRS shall be self-funded through its own operations, including but not limited to income derived from interest, transaction fees, and open market operations.

§ 3 A report detailing monetary policy decisions, economic assessments, and financial performance shall be submitted to the President and Senate at least once during every Chair and Vice Chair’s term.

§ 4 The SRS shall maintain an open data portal to enhance public understanding of its operations and economic forecasts.


==Article VI Regulatory and Supervisory Authority==

§ 1 The SRS is empowered to oversee and enforce regulations on all financial institutions operating within the jurisdiction. This includes:
:§ 1.1 Conducting audits.
:§ 1.2 Setting capital and liquidity requirements.
:§ 1.3 Monitoring risk exposure.
:§ 1.4 Ensuring compliance with financial laws
:§ 1.5 In cases of noncompliance or threats to financial stability, the SRS may impose corrective measures, such as fines, restrictions on operations, or, in extreme cases, the suspension or revocation of licenses.
§ 2 In cases of non-compliance with SRS directives or regulatory standards the SRS may enact any of the following:
:§ 2.1 Impose fines.
:§ 2.2 Restrict specific business activities.
:§ 2.3 Mandate corrective action plans.
:§ 2.4 Enhance supervisory oversight.
:§ 2.5 Suspend or revoke licenses or business classifications.
:§ 2.6 Refer severe violations for legal action, with penalties determined based on the severity and impact of the infraction.
§ 3 The SRS shall coordinate with existing regulatory agencies to ensure a unified approach to financial oversight.

==Article VII Implementation==

§ 1 This Act shall come into effect fourteen (14) days following its passage by the Legislature.

§ 2 Within the first seven (7) days of passage of the Act the Treasury Secretary and Senate will make the appointments to the Board of Directors so SRS leadership is in place when the Act takes effect.