THE KINGDOMS AND LANDS OF THE CROWN OF RUTHENIA AND THE LANDS REPRESENTED IN THE COUNCIL OF KARNIA
HIS IMPERIAL AND ROYAL MAJESTY’S OWN OFFICE
HIS IMPERIAL AND ROYAL MAJESTY’S OWN OFFICE
A bill about the creation of the Imperial Bank of Karnia-Ruthenia.
WE, the EMPEROR OF KARNIA AND KING OF RUTHENIA, King of Bessabia, King of Acrin, King of Horvatia, Szolnók, Geza, Letingia, Escandia, King of Jestia, etc.; Archduke of Karnia, Grand Duke of Gaussland, Caledonia; Duke of Ladislavia, Hoheneinsamkeit, Weißeswasser, Csorna, Chedowski, Balaton; Grand Prince of Karcag, Margrave of Luftrein, Duke of Persenburg, Götzödorf, Mohács, Pannonhalm, Podenbrad, Gyalla, Oswiencin, Zallanta, Cieszpreg, Fertodin, Rugoz, Árpád; Princely Count of Bihar, Tamaz, Koberg, Gerizia, Grevenia; Prince of Thomaz-Rocha, Bersód; Margrave of Upper and Lower Lusitia; Count of Heves, Feldkirchenberg, Brevento, Szentes, etc.; Lord of Fürstenbergserdboden, Kazin, etc., etc. etc., in full harmony with the Imperial Constitution, and in full compliance with the provisions of article 65, subsection I, decree the following:—
ARTICLE I. The purpose of the Imperial Bank of Karnia-Ruthenia, or the central bank of Karnia-Ruthenia, is to issue banknotes and to carry out currency and monetary control. In addition to what is prescribed in the preceding paragraph, the Imperial Bank's purpose is to ensure smooth settlement of funds among banks and other financial institutions, thereby contributing to the maintenance of stability of the financial system.
ARTICLE II. Currency and monetary control by the Imperial Bank shall be aimed at achieving price stability, thereby contributing to the sound development of the national economy.
ARTICLE III. The Bank of Karnia-Ruthenia's autonomy regarding currency and monetary control shall be respected. The Imperial Bank shall endeavor to clarify to the citizen the content of its decisions, as well as its decision-making process, regarding currency and monetary control.
ARTICLE IV. The Imperial Bank shall, taking into account the fact that currency and monetary control is a component of overall economic policy, always maintain close contact with the government and exchange views sufficiently, so that its currency and monetary control and the basic stance of the government's economic policy shall be mutually compatible.
ARTICLE V. In light of the public nature of its business and property, the Imperial Bank shall endeavor to conduct its business in a proper and efficient manner. In implementing this Act, due consideration shall be given to the autonomy of the Imperial Bank of Karnia-Ruthenia's business operations.
ARTICLE VI. The Imperial Bank shall be a juridical person.
ARTICLE VII. The Imperial Bank shall locate its head office in Persenburg.
ARTICLE VIII. The amount of the Imperial Bank of Karnia-Ruthenia's stated capital shall be the value of the ballast to be declared by both the government on 06 January 2017 and non-governmental persons.
ARTICLE IX. The Imperial Bank shall issue investment securities for capital contribution pursuant to paragraph 1 of the preceding Article.
ARTICLE X. The Imperial Bank shall stipulate the following matters in its articles of incorporation:
a. Purpose;
b. Official name;
c. Locations of the head office and branch offices;
d. Matters concerning the stated capital and contribution;
e. Matters concerning the Policy Board;
f. Matters concerning officers;
g. Matters concerning its business and the execution thereof;
h. Matters concerning the issuance of banknotes;
i. Matters concerning accounting;
j. Means for public notice and publication.
§. Any amendments to the articles of incorporation shall not come into effect unless authorized by the Minister of Finance and the Prime Minister.
ARTICLE XI. The Imperial Bank shall register relevant matters pursuant to a Cabinet Order. Matters to be registered as prescribed in this article may not be asserted against a third party unless having been registered.
ARTICLE XII. No person other than the Imperial Bank of Karnia-Ruthenia may use the name "Bank of Karnia-Ruthenia", "Imperial Bank" or any other similar names.
ARTICLE XIII. A Policy Board (hereinafter referred to as the "Board" in this and the following Chapter) shall be established in the Imperial Bank.
ARTICLE XIV. The following matters concerning currency and monetary control shall be decided by the Board:
a. Determining or altering the basic discount rate and other discount rates pertaining to the discounting of negotiable instruments, as well as the types and conditions of negotiable instruments pertaining to the said discounting;
b. Determining or altering the basic loan rate and other loan rates pertaining to the loans, as well as the types, conditions, and value of collateral pertaining to the said loans;
c. Determining, altering, or abolishing reserve requirement ratios, the base date, and other matters;
d. Determining or altering the guidelines for financial market control (currency and monetary control conducted through financial markets [including open market operations]) through such measures as the buying and selling of negotiable instruments, bonds, or electronically recorded claims, as well as determining or altering the types, conditions, and other matters of negotiable instruments, bonds, or electronically recorded claims pertaining to the said financial market control;
e. Determining or altering other guidelines for currency and monetary control;
f. Determining or altering the Bank of Karnia-Ruthenia's view on currency and monetary control, including its basic view on economic and monetary conditions which provides the basis for matters listed in the preceding items.
g. Conducting the buying and selling of foreign exchange to facilitate international financial business which the Minister of Finance specifies as constituting cooperation in the field of international finance, initiating transactions with a foreign central bank, etc.
h. Altering the articles of incorporation;
i. Preparing or altering a statement of operation procedures;
j. Establishing, relocating, or abolishing offices including branch offices and agencies;
k. Determining important matters concerning the Bank of Karnia-Ruthenia's organization and size of staff (excluding what is listed in the preceding item);
l. Establishing or altering the standards for paying remuneration;
m. Acquiring or disposing of real estate and other important property;
n. Making or altering a budget for expenses, preparing an inventory, balance sheet, profit and loss statement, and statement of accounts, and determining important matters concerning accounting including the appropriation of any surplus;
o. Determining matters to be decided by the Board pursuant to this Act or to be carried out by the Board pursuant to this Act or other laws and regulations;
p. Determining matters which the Board finds particularly necessary, in addition to what is listed in the preceding items.
§. The Board shall supervise the execution of their duties by the officers (excluding Auditors and Counsellors in this paragraph) of the Imperial Bank.
ARTICLE XV. The Board shall be composed of three members.
a. The Board shall have a chairperson, who shall be elected by Board members from among themselves. The chairperson shall exercise general control over Board business.
b. The Board shall designate, in advance, a member who shall perform the duties of the chairperson when the chairperson is prevented from attending to his/her duties.
ARTICLE XVI. Board meetings shall be called by the chairperson of the Board.
a. The chairperson shall regularly call Board meetings at which the matters listed as "monetary control matters" to be discussed.
b. The preceding paragraph shall not be interpreted as preventing a Board meeting for monetary control matters from being called on an ad hoc basis, when the chairperson finds it necessary.
ARTICLE XVII. The Board may neither meet nor vote unless the chairperson and two-thirds or more of the total incumbent Board members are present. Matters shall be decided by a majority of votes cast by Board members who are present. When the votes are equally split, the chairperson shall make a final decision. Except for those specified in this Act, procedures of meetings and other necessary matters concerning the administration of the Board shall be determined by the Board.
ARTICLE XVIII. The Minister of Finances may, when necessary, attend and express opinions at Board meetings for monetary control matters. The Minister of Finances, or a delegate designated by him/her, may, when attending the Board meetings for monetary control matters, submit proposals concerning monetary control matters, or request that the Board postpone a vote on proposals on monetary control matters submitted at the meeting until the next Board meeting for monetary control matters. When a request has been made to postpone a vote as prescribed in the preceding paragraph, the Board shall decide whether or not to accommodate the request, in accordance with the Board's practice for voting.
ARTICLE XIX. After each Board meeting for monetary control matters, the chairperson shall promptly prepare a document describing an outline of the discussion at the meeting in accordance with the decisions made by the Board, and make public the document following its approval at another Board meeting for monetary control matters. The chairperson shall prepare a transcript of each Board meeting for monetary control matters in accordance with the decisions made by the Board, and make public the transcript after the expiration of a period of time which is determined by the Board as appropriate.
ARTICLE XX. The Governor of the Imperial Bank shall represent the Imperial Bank of Karnia-Ruthenia and exercise general control over the Bank's business in accordance with decisions made by the Board.
a. The Deputy Governors shall, in accordance with decisions made by the Governor, represent the Imperial Bank, administer the business of the Bank assisting the Governor, act for the Governor whenever he/she is prevented from attending to his/her duties, and perform the Governor's duties during a vacancy in the office of the Governor.
b. The Auditors shall audit the business of the Imperial Bank.
c. The Auditors may, when they find it necessary based on the audit results, submit their opinions to the Minister of Finances, the Prime Minister, or the Board.
d. The Executive Directors shall, in accordance with the decisions made by the Governor, administer the business of the Imperial Bank assisting the Governor and the Deputy Governors, act for the Governor when the Governor and the Deputy Governors are prevented from attending to their duties, and perform the Governor's duties during a vacancy in the office of the Governor and the Deputy Governors.
e. The Counsellors shall be consulted by the Board on any important matters concerning the Bank of Karnia-Ruthenia's business operations, and may express their opinions to the Board when they find it necessary.
§1º. Restrictions on the authority of representation of the Governor or the Deputy Governors may not be asserted against a third party without knowledge of such restrictions.
(Acts of Conflict of Interest)
§2º. The Governor or the Deputy Governors shall not have the authority of representation with regard to matters for which their interests and the interest of the Imperial Bank conflict with each other. In this case, the court shall appoint a special agent, upon a request from an interested person or a public prosecutor.
ARTICLE XXI. The Governor and the Deputy Governors shall be appointed by the Cabinet, subject to the consent of the House of Representatives and the House of Peers.
ARTICLE XXII. The terms of office shall be five years for the Governor and two years for Deputy Governors, Members of the Policy Board, Auditors and Executive Directors, and Counsellors. However, if a vacancy occurs in the office of a Governor, Deputy Governor, or Member of the Policy Board, the term of office for a substitute Governor, Deputy Governor, or Member of the Policy Board shall be limited to the remaining term of his/her predecessor.
§. The Governor, Deputy Governors, Members of the Policy Board, Auditors, Executive Directors, and Counsellors may be reappointed.
ARTICLE XXIII. Officers of the Imperial Bank shall not be dismissed against their will during their terms of office, except in the following cases:
a. An officer has received a ruling of the commencement of bankruptcy proceedings;
b. An officer has received punishment under this Act;
c. An officer has been sentenced to imprisonment without work or a heavier punishment;
d. An officer has been deemed incapable of carrying out his/her duties due to mental or physical disorder by the Board (or by the Board and the Cabinet in the case of the Auditors).
§1º. The Cabinet or the Minister of Finances shall dismiss an officer of the Imperial Bank if he/she falls under any of the cases listed in the items of the preceding paragraph.
§2º. In addition to the case prescribed in the preceding paragraph, the Minister of Finances may dismiss an Executive Director when the Board has requested the dismissal thereof.
ARTICLE XXIV. An officer of the Imperial Bank shall not carry out commercial business or other business for the purpose of pecuniary gain.
ARTICLE XXV. The Governor and the Deputy Governors may appoint agents, from among the Imperial Bank's Executive Directors or employees, who shall have the authority to act on behalf of the Bank in all juridical and non-juridical matters with regard to the business of the Bank's head office and branch offices.
ARTICLE XXVI. The Imperial Bank's employees shall be appointed by the Governor.
ARTICLE XXVII. The Imperial Bank's officers and employees shall not leak or misappropriate secrets which they have learned in the course of their duties. The same shall apply even after they have left the Bank.
ARTICLE XXVIII. The Imperial Bank's officers and employees shall be deemed to be those engaged in public service pursuant to laws and regulations.
ARTICLE XXIX. The Imperial Bank shall, in light of the public nature of its business and in order to ensure the proper execution of their duties by its officers and employees, establish rules on service for its officers and employees, such as rules on the obligations to devote themselves to their duties and to separate themselves from private enterprises, and shall report such rules to the Minister of Finances and, at the same time, make them public. The same shall apply when making any change to the rules.
ARTICLE XXX. In order to achieve the purpose prescribed in Article 1, the Imperial Bank may conduct the following business:
a. Discounting of commercial bills and other negotiable instruments;
b. Making loans against collateral in the form of negotiable instruments, national government securities and other securities, or electronically recorded claims;
c. Buying and selling of commercial bills and other negotiable instruments, national government securities and other bonds, or electronically recorded claims;
d. Lending and borrowing of national government securities and other bonds against cash collateral;
e. Taking deposits;
f. Conducting domestic funds transfers;
g. Taking safe custody of securities and other instruments pertaining to property rights, or certificates;
h. Buying and selling gold and silver bullion and carrying out business related to business set forth in the preceding items.
ARTICLE XXXI. As the central bank of Karnia-Ruthenia, the Imperial Bank may conduct the following business with the national government:
a. Making uncollateralized loans within the limit decided by the Diet;
b. Making uncollateralized loans for the national government's temporary borrowing concerning the national government's accounting;
c. Subscribing or underwriting national government securities within the limit decided by the Diet;
d. Subscribing or underwriting financing bills and other financing securities;
e. Taking safe custody of precious metals and other articles.
ARTICLE XXXII. As the central bank of Karnia-Ruthenia, the Imperial Bank shall handle treasury money, pursuant to laws and regulations. When handling treasury money as prescribed in this article, the Imperial Bank of Japan may conduct the business necessary for this purpose.
ARTICLE XXXIII. As the central bank of Karnia-Ruthenia, the Imperial Bank shall handle national government affairs concerning currency and finance, pursuant to laws and regulations.
a. When handling national government affairs as prescribed in the caput of the this article, the Imperial Bank may conduct the business necessary for this purpose.
b. Expenses necessary for handling national government affairs as prescribed in paragraph 1 may be borne by the Imperial Bank, pursuant to laws and regulations.
ARTICLE XXXIV. The Imperial Bank may provide financial institutions (banks and other institutions engaged in the business of taking deposits, etc. and in funds transfers in the course of trade; the same shall apply hereinafter) and other financial business entities specified by a Cabinet Order (hereinafter collectively referred to as "financial institutions, etc.") with uncollateralized loans the amount of which is equivalent to the shortage of funds for a period no longer than the length of time prescribed by a Cabinet Order, when the relevant financial institutions, etc. unexpectedly experience a temporary shortage of funds necessary for payment due to accidental causes, including failures in electronic data processing systems, whereby their business operations may be seriously hampered if the shortage is not recovered swiftly, provided that the Bank finds the advance is necessary to secure smooth settlement of funds among financial institutions.
§. The Imperial Bank shall, when having provided loans as prescribed in the preceding paragraph, report to that effect to the Chancellor and the Minister of Finances without delay.
ARTICLE XXXV. The Chancellor and the Minister of Finances may, when they find it especially necessary for the maintenance of stability of the financial system, such as in the case where they find that serious problems may arise in the maintenance of stability of the financial system, request the Imperial Bank to conduct the business necessary to maintain stability of the financial system, such as to provide loans to the financial institution pertaining to the said consultation.
a. When a request has been made from the Chancellor and the Minister of Finances as prescribed in the preceding paragraph, the Imperial Bank may conduct the business necessary to maintain stability of the financial system, including the provision of loans under special conditions.
ARTICLE XXXVI. In addition to the business prescribed in previous articles, the Imperial Bank may, upon authorization from the Chancellor and the Minister of Finances, conduct the business deemed to contribute to smooth settlement of funds among financial institutions.
ARTICLE XXXVII. The Imperial Bank may, when necessary, buy and sell foreign exchange on its own account or as an agent handling national government affairs, and it may also buy and sell foreign exchange on behalf of foreign central banks, etc. or international institutions as their agent in order to cooperate with them as the central bank of Japan.
§ 1º. The Imperial Bank shall buy and sell foreign exchange as an agent handling national government affairs when the purpose of the buying and selling is to stabilize the exchange rate of national currency.
§ 2º. The Imperial Bank shall, when buying and selling foreign exchange on its own account or as an agent on behalf of foreign central banks, etc. or international institutions to cooperate with them as the central bank of Karnia-Ruthenia, conduct the buying and selling for the purpose which the Minister of Finances specifies as constituting cooperation in the field of international finance, at the request, or upon the approval, of the Minister of Finances.
ARTICLE XXXVIII. The Imperial Bank may conduct the following business with foreign central banks, etc. or international institutions in order to cooperate with them as the central bank of Karnia-Ruthenia:
a. Taking deposits pertaining to deposit money denominated in national currency;
b. Buying and selling national government securities in exchange for deposits received through the business set forth in the preceding item;
c. Taking safe custody of securities, precious metals, and other articles;
d. Carrying out intermediary, brokerage, or agency services for sales and purchases of national government securities conducted by the said foreign central banks, etc. or international institutions;
e. Other business specified by an ordinance of the Ministry of Finances as those deemed to contribute to the proper management of national currency or assets denominated in national currency held by the said foreign central banks, etc. or international institutions.
ARTICLE XXXIX. In addition to the business prescribed in the preceding Article, the Imperial Bank may conduct the following transactions and other transactions necessary for cooperating, as the central bank of Karnia-Ruthenia, with foreign central banks, etc. or international institutions in the field of international finance, including the provision of international financial assistance, at the request, or upon the approval, of the Minister of Finances:
a. Substituting loan claims against foreign central banks;
b. Providing credit to foreign central banks, etc. or international institutions.
ARTICLE XL. The Imperial Bank may not conduct any business other than that specified by this Act as the business of the Bank; provided, however, that this shall not apply to the case where such business is necessary to achieve the Bank's purpose specified by this Act and the Bank has obtained authorization from the Minister of Finances and the Chancellor.
ARTICLE XLI. The Imperial Bank may conclude a contract with financial institutions, etc. which would be the counterparty in such business (hereinafter referred to as the "counterparty financial institutions, etc." in this Article) concerning on-site examinations (examinations which the Bank carries out regarding the business operations and the state of the property of the counterparty financial institutions, etc. by visiting the premises thereof; hereinafter the same shall apply in this Article) (such contract shall meet the requirements specified by a Cabinet Order including those whereby the Bank shall notify and obtain prior consent from the counterparty financial institutions, etc. when carrying out on-site examinations).
ARTICLE XLII. The Imperial Bank shall issue banknotes.
§ 1º. The banknotes issued by the Imperial Bank as prescribed in this article shall be legal tender and hence shall be used for payment without limits.
§ 2º. The Minister of Finances shall decide the forms of Imperial Bank notes and publicly notify them.
ARTICLE XLIII. The Imperial Bank shall exchange, without fees, banknotes rendered unfit for further circulation due to defacement, mutilation, or other causes, pursuant to an Ordinance of the Ministry of Finances.
ARTICLE XLIV. The Imperial Bank shall determine the procedures for printing and canceling banknotes and submit those procedures to the Minister of Finances for approval. The same shall apply when making any change to the procedures.
ARTICLE XLV. The business year of the Imperial Bank shall run April 1 through March 31 of the following year.
ARTICLE XLVI. Every business year, the Imperial Bank shall make a budget for expenses (limited to those specified by a Cabinet Order as not hampering the currency and monetary control; hereinafter such budget shall be referred to as a "budget for expenses"), and submit it to the Minister of Finances for authorization before the business year begins. The same shall apply when making any change to the budget.
§. If the Minister of Finances finds it inappropriate to authorize the budget for expenses submitted as prescribed in the preceding paragraph, he/she shall make prompt notice to the Imperial Bank to that effect along with the reason therefor, and make public the details of the submitted budget for expenses and the said reason.
ARTICLE XLVII. The Imperial Bank shall prepare an inventory of property and a balance sheet for each six-month period running from April through September and from October through March and prepare a profit and loss statement for each business year as well as for each six-month period mentioned above, and submit these documents (hereinafter referred to as "financial statements") attached with Auditors' written opinions thereon to the Minister of Finances for approval within two months after the relevant six-month period or the business year has elapsed.
ARTICLE XLVIII. The Imperial Bank shall reserve, as a reserve fund, surplus resulting from the settlement of profits and losses for each business year.
§ 1º. Irrespective of the provisions of the preceding paragraph, the Imperial Bank may, when it finds it especially necessary, reserve the money which exceeds the amount prescribed in the preceding paragraph as a reserve fund, upon authorization from the Minister of Finances.
§ 2º. The reserve fund reserved as prescribed in the preceding two paragraphs shall not be disposed of, except to cover losses incurred by the Imperial Bank or to be appropriated for dividends as prescribed in the following paragraph.
§ 3º. The Imperial Bank may, upon authorization from the Minister of Finances, pay dividends to contributories out of the surplus resulting from the settlement of profits and losses for each business year; provided, however, that the rate of dividend payments against paid-up capital may not exceed five-hundredths per annum.
§ 4º. After deducting the amount reserved as prescribed in paragraphs 1 and 2 and the dividend payments prescribed in the preceding paragraph from the surplus resulting from the settlement of profits and losses for each business year, the Imperial Bank shall pay the remaining surplus to the national treasury within two months after each relevant business year ends.
§ 5º. The government may have the Imperial Bank make the payment to the national treasury for each business year as prescribed in the preceding paragraph, partially during the said business year, by estimate, pursuant to a Cabinet Order.
ARTICLE XLIX. The Imperial Bank shall, approximately every six months, prepare a written report on the Policy Board resolutions regarding the conditions of business operations that the Bank has conducted based thereon and submit it to the Imperial Diet through the Minister of Finances.
§ 1º. The Imperial Bank shall endeavor to explain to the Imperial Diet the written report set forth in the preceding paragraph.
§ 2º. The Imperial Bank's Governor or a representative designated by him/her, shall attend the sessions of the House of Peers or the House of Representatives when requested by them, in order to explain the state of the Bank's business operations and property.
ARTICLE XLX. When having received the approval regarding financial statements for each business year, the Imperial Bank shall prepare, without delay, an outline of its business operations for the business year and make it public along with the said financial statements and a statement of accounts for the said business year.
ARTICLE XLXI. The Minister of Finances or the Chancellor may, when he/she finds that the Imperial Bank, its officers or employees have violated or are likely to violate this Act, other laws and regulations, or articles of incorporation, request the Bank to take the measures necessary to rectify such acts.
§. When a request has been made from the Minister of Finances or the Chancellor as prescribed in the preceding paragraph, the Imperial Bank shall promptly take measures which the Policy Board finds necessary, such as rectifying the said acts, and report those measures to the Minister of Finances or the Chancellor.
ARTICLE XLXII. The Minister of Finances or the Chancellor may, when he/she finds it necessary in light of the conditions of the business operations of the Imperial Bank, request the Bank to submit a report or relevant materials.
ARTICLE XLXIII. In the case where the Imperial Bank has been dissolved, when the residual assets of the Bank exceed the amount of paid-up capital, the residual assets equivalent to the excess amount shall belong to the national treasury.
ARTICLE XLXIV. Cases concerning the appointment of special agents shall be under the jurisdiction of the Imperial Supreme Court which exercises jurisdiction over the location of the head office of the Imperial Bank.
ARTICLE XLXV. Those who have leaked or misappropriated secrets shall be punished in the terms of the law.
ARTICLE XLXVI. The Imperial Bank's officers or employees shall be punished by a non-penal fine when falling under any of the following items:
a. Having failed to obtain the authorization from the Minister of Finances or from both the Minister of Finances and the Chancellor, or the approval from the Minister of Finances, as required by this Act;
b. Having failed to make a report to the Minister of Finances or to both the Minister of Finances and the Chancellor as required by this Act, or having made a false report or used false materials;
c. Having failed to make public what is required by this Act, or having made it public falsely;
d. Having neglected to register in violation of a Cabinet Order;
e. Having been engaged in other work that brings remuneration or having carried out commercial business or other business for the purpose of pecuniary gain;
f. Having failed to keep the financial statements, the statement of accounts, or the Auditors' written opinions or having failed to make them available for public inspection;
g. Having failed to reserve a surplus as a reserve fund;
h. Having disposed of a reserve fund.
ARTICLE XLXVII. This law shall come into effect on 01 April 2018.
ARTICLE I. The purpose of the Imperial Bank of Karnia-Ruthenia, or the central bank of Karnia-Ruthenia, is to issue banknotes and to carry out currency and monetary control. In addition to what is prescribed in the preceding paragraph, the Imperial Bank's purpose is to ensure smooth settlement of funds among banks and other financial institutions, thereby contributing to the maintenance of stability of the financial system.
ARTICLE II. Currency and monetary control by the Imperial Bank shall be aimed at achieving price stability, thereby contributing to the sound development of the national economy.
ARTICLE III. The Bank of Karnia-Ruthenia's autonomy regarding currency and monetary control shall be respected. The Imperial Bank shall endeavor to clarify to the citizen the content of its decisions, as well as its decision-making process, regarding currency and monetary control.
ARTICLE IV. The Imperial Bank shall, taking into account the fact that currency and monetary control is a component of overall economic policy, always maintain close contact with the government and exchange views sufficiently, so that its currency and monetary control and the basic stance of the government's economic policy shall be mutually compatible.
ARTICLE V. In light of the public nature of its business and property, the Imperial Bank shall endeavor to conduct its business in a proper and efficient manner. In implementing this Act, due consideration shall be given to the autonomy of the Imperial Bank of Karnia-Ruthenia's business operations.
ARTICLE VI. The Imperial Bank shall be a juridical person.
ARTICLE VII. The Imperial Bank shall locate its head office in Persenburg.
ARTICLE VIII. The amount of the Imperial Bank of Karnia-Ruthenia's stated capital shall be the value of the ballast to be declared by both the government on 06 January 2017 and non-governmental persons.
ARTICLE IX. The Imperial Bank shall issue investment securities for capital contribution pursuant to paragraph 1 of the preceding Article.
ARTICLE X. The Imperial Bank shall stipulate the following matters in its articles of incorporation:
a. Purpose;
b. Official name;
c. Locations of the head office and branch offices;
d. Matters concerning the stated capital and contribution;
e. Matters concerning the Policy Board;
f. Matters concerning officers;
g. Matters concerning its business and the execution thereof;
h. Matters concerning the issuance of banknotes;
i. Matters concerning accounting;
j. Means for public notice and publication.
§. Any amendments to the articles of incorporation shall not come into effect unless authorized by the Minister of Finance and the Prime Minister.
ARTICLE XI. The Imperial Bank shall register relevant matters pursuant to a Cabinet Order. Matters to be registered as prescribed in this article may not be asserted against a third party unless having been registered.
ARTICLE XII. No person other than the Imperial Bank of Karnia-Ruthenia may use the name "Bank of Karnia-Ruthenia", "Imperial Bank" or any other similar names.
ARTICLE XIII. A Policy Board (hereinafter referred to as the "Board" in this and the following Chapter) shall be established in the Imperial Bank.
ARTICLE XIV. The following matters concerning currency and monetary control shall be decided by the Board:
a. Determining or altering the basic discount rate and other discount rates pertaining to the discounting of negotiable instruments, as well as the types and conditions of negotiable instruments pertaining to the said discounting;
b. Determining or altering the basic loan rate and other loan rates pertaining to the loans, as well as the types, conditions, and value of collateral pertaining to the said loans;
c. Determining, altering, or abolishing reserve requirement ratios, the base date, and other matters;
d. Determining or altering the guidelines for financial market control (currency and monetary control conducted through financial markets [including open market operations]) through such measures as the buying and selling of negotiable instruments, bonds, or electronically recorded claims, as well as determining or altering the types, conditions, and other matters of negotiable instruments, bonds, or electronically recorded claims pertaining to the said financial market control;
e. Determining or altering other guidelines for currency and monetary control;
f. Determining or altering the Bank of Karnia-Ruthenia's view on currency and monetary control, including its basic view on economic and monetary conditions which provides the basis for matters listed in the preceding items.
g. Conducting the buying and selling of foreign exchange to facilitate international financial business which the Minister of Finance specifies as constituting cooperation in the field of international finance, initiating transactions with a foreign central bank, etc.
h. Altering the articles of incorporation;
i. Preparing or altering a statement of operation procedures;
j. Establishing, relocating, or abolishing offices including branch offices and agencies;
k. Determining important matters concerning the Bank of Karnia-Ruthenia's organization and size of staff (excluding what is listed in the preceding item);
l. Establishing or altering the standards for paying remuneration;
m. Acquiring or disposing of real estate and other important property;
n. Making or altering a budget for expenses, preparing an inventory, balance sheet, profit and loss statement, and statement of accounts, and determining important matters concerning accounting including the appropriation of any surplus;
o. Determining matters to be decided by the Board pursuant to this Act or to be carried out by the Board pursuant to this Act or other laws and regulations;
p. Determining matters which the Board finds particularly necessary, in addition to what is listed in the preceding items.
§. The Board shall supervise the execution of their duties by the officers (excluding Auditors and Counsellors in this paragraph) of the Imperial Bank.
ARTICLE XV. The Board shall be composed of three members.
a. The Board shall have a chairperson, who shall be elected by Board members from among themselves. The chairperson shall exercise general control over Board business.
b. The Board shall designate, in advance, a member who shall perform the duties of the chairperson when the chairperson is prevented from attending to his/her duties.
ARTICLE XVI. Board meetings shall be called by the chairperson of the Board.
a. The chairperson shall regularly call Board meetings at which the matters listed as "monetary control matters" to be discussed.
b. The preceding paragraph shall not be interpreted as preventing a Board meeting for monetary control matters from being called on an ad hoc basis, when the chairperson finds it necessary.
ARTICLE XVII. The Board may neither meet nor vote unless the chairperson and two-thirds or more of the total incumbent Board members are present. Matters shall be decided by a majority of votes cast by Board members who are present. When the votes are equally split, the chairperson shall make a final decision. Except for those specified in this Act, procedures of meetings and other necessary matters concerning the administration of the Board shall be determined by the Board.
ARTICLE XVIII. The Minister of Finances may, when necessary, attend and express opinions at Board meetings for monetary control matters. The Minister of Finances, or a delegate designated by him/her, may, when attending the Board meetings for monetary control matters, submit proposals concerning monetary control matters, or request that the Board postpone a vote on proposals on monetary control matters submitted at the meeting until the next Board meeting for monetary control matters. When a request has been made to postpone a vote as prescribed in the preceding paragraph, the Board shall decide whether or not to accommodate the request, in accordance with the Board's practice for voting.
ARTICLE XIX. After each Board meeting for monetary control matters, the chairperson shall promptly prepare a document describing an outline of the discussion at the meeting in accordance with the decisions made by the Board, and make public the document following its approval at another Board meeting for monetary control matters. The chairperson shall prepare a transcript of each Board meeting for monetary control matters in accordance with the decisions made by the Board, and make public the transcript after the expiration of a period of time which is determined by the Board as appropriate.
ARTICLE XX. The Governor of the Imperial Bank shall represent the Imperial Bank of Karnia-Ruthenia and exercise general control over the Bank's business in accordance with decisions made by the Board.
a. The Deputy Governors shall, in accordance with decisions made by the Governor, represent the Imperial Bank, administer the business of the Bank assisting the Governor, act for the Governor whenever he/she is prevented from attending to his/her duties, and perform the Governor's duties during a vacancy in the office of the Governor.
b. The Auditors shall audit the business of the Imperial Bank.
c. The Auditors may, when they find it necessary based on the audit results, submit their opinions to the Minister of Finances, the Prime Minister, or the Board.
d. The Executive Directors shall, in accordance with the decisions made by the Governor, administer the business of the Imperial Bank assisting the Governor and the Deputy Governors, act for the Governor when the Governor and the Deputy Governors are prevented from attending to their duties, and perform the Governor's duties during a vacancy in the office of the Governor and the Deputy Governors.
e. The Counsellors shall be consulted by the Board on any important matters concerning the Bank of Karnia-Ruthenia's business operations, and may express their opinions to the Board when they find it necessary.
§1º. Restrictions on the authority of representation of the Governor or the Deputy Governors may not be asserted against a third party without knowledge of such restrictions.
(Acts of Conflict of Interest)
§2º. The Governor or the Deputy Governors shall not have the authority of representation with regard to matters for which their interests and the interest of the Imperial Bank conflict with each other. In this case, the court shall appoint a special agent, upon a request from an interested person or a public prosecutor.
ARTICLE XXI. The Governor and the Deputy Governors shall be appointed by the Cabinet, subject to the consent of the House of Representatives and the House of Peers.
ARTICLE XXII. The terms of office shall be five years for the Governor and two years for Deputy Governors, Members of the Policy Board, Auditors and Executive Directors, and Counsellors. However, if a vacancy occurs in the office of a Governor, Deputy Governor, or Member of the Policy Board, the term of office for a substitute Governor, Deputy Governor, or Member of the Policy Board shall be limited to the remaining term of his/her predecessor.
§. The Governor, Deputy Governors, Members of the Policy Board, Auditors, Executive Directors, and Counsellors may be reappointed.
ARTICLE XXIII. Officers of the Imperial Bank shall not be dismissed against their will during their terms of office, except in the following cases:
a. An officer has received a ruling of the commencement of bankruptcy proceedings;
b. An officer has received punishment under this Act;
c. An officer has been sentenced to imprisonment without work or a heavier punishment;
d. An officer has been deemed incapable of carrying out his/her duties due to mental or physical disorder by the Board (or by the Board and the Cabinet in the case of the Auditors).
§1º. The Cabinet or the Minister of Finances shall dismiss an officer of the Imperial Bank if he/she falls under any of the cases listed in the items of the preceding paragraph.
§2º. In addition to the case prescribed in the preceding paragraph, the Minister of Finances may dismiss an Executive Director when the Board has requested the dismissal thereof.
ARTICLE XXIV. An officer of the Imperial Bank shall not carry out commercial business or other business for the purpose of pecuniary gain.
ARTICLE XXV. The Governor and the Deputy Governors may appoint agents, from among the Imperial Bank's Executive Directors or employees, who shall have the authority to act on behalf of the Bank in all juridical and non-juridical matters with regard to the business of the Bank's head office and branch offices.
ARTICLE XXVI. The Imperial Bank's employees shall be appointed by the Governor.
ARTICLE XXVII. The Imperial Bank's officers and employees shall not leak or misappropriate secrets which they have learned in the course of their duties. The same shall apply even after they have left the Bank.
ARTICLE XXVIII. The Imperial Bank's officers and employees shall be deemed to be those engaged in public service pursuant to laws and regulations.
ARTICLE XXIX. The Imperial Bank shall, in light of the public nature of its business and in order to ensure the proper execution of their duties by its officers and employees, establish rules on service for its officers and employees, such as rules on the obligations to devote themselves to their duties and to separate themselves from private enterprises, and shall report such rules to the Minister of Finances and, at the same time, make them public. The same shall apply when making any change to the rules.
ARTICLE XXX. In order to achieve the purpose prescribed in Article 1, the Imperial Bank may conduct the following business:
a. Discounting of commercial bills and other negotiable instruments;
b. Making loans against collateral in the form of negotiable instruments, national government securities and other securities, or electronically recorded claims;
c. Buying and selling of commercial bills and other negotiable instruments, national government securities and other bonds, or electronically recorded claims;
d. Lending and borrowing of national government securities and other bonds against cash collateral;
e. Taking deposits;
f. Conducting domestic funds transfers;
g. Taking safe custody of securities and other instruments pertaining to property rights, or certificates;
h. Buying and selling gold and silver bullion and carrying out business related to business set forth in the preceding items.
ARTICLE XXXI. As the central bank of Karnia-Ruthenia, the Imperial Bank may conduct the following business with the national government:
a. Making uncollateralized loans within the limit decided by the Diet;
b. Making uncollateralized loans for the national government's temporary borrowing concerning the national government's accounting;
c. Subscribing or underwriting national government securities within the limit decided by the Diet;
d. Subscribing or underwriting financing bills and other financing securities;
e. Taking safe custody of precious metals and other articles.
ARTICLE XXXII. As the central bank of Karnia-Ruthenia, the Imperial Bank shall handle treasury money, pursuant to laws and regulations. When handling treasury money as prescribed in this article, the Imperial Bank of Japan may conduct the business necessary for this purpose.
ARTICLE XXXIII. As the central bank of Karnia-Ruthenia, the Imperial Bank shall handle national government affairs concerning currency and finance, pursuant to laws and regulations.
a. When handling national government affairs as prescribed in the caput of the this article, the Imperial Bank may conduct the business necessary for this purpose.
b. Expenses necessary for handling national government affairs as prescribed in paragraph 1 may be borne by the Imperial Bank, pursuant to laws and regulations.
ARTICLE XXXIV. The Imperial Bank may provide financial institutions (banks and other institutions engaged in the business of taking deposits, etc. and in funds transfers in the course of trade; the same shall apply hereinafter) and other financial business entities specified by a Cabinet Order (hereinafter collectively referred to as "financial institutions, etc.") with uncollateralized loans the amount of which is equivalent to the shortage of funds for a period no longer than the length of time prescribed by a Cabinet Order, when the relevant financial institutions, etc. unexpectedly experience a temporary shortage of funds necessary for payment due to accidental causes, including failures in electronic data processing systems, whereby their business operations may be seriously hampered if the shortage is not recovered swiftly, provided that the Bank finds the advance is necessary to secure smooth settlement of funds among financial institutions.
§. The Imperial Bank shall, when having provided loans as prescribed in the preceding paragraph, report to that effect to the Chancellor and the Minister of Finances without delay.
ARTICLE XXXV. The Chancellor and the Minister of Finances may, when they find it especially necessary for the maintenance of stability of the financial system, such as in the case where they find that serious problems may arise in the maintenance of stability of the financial system, request the Imperial Bank to conduct the business necessary to maintain stability of the financial system, such as to provide loans to the financial institution pertaining to the said consultation.
a. When a request has been made from the Chancellor and the Minister of Finances as prescribed in the preceding paragraph, the Imperial Bank may conduct the business necessary to maintain stability of the financial system, including the provision of loans under special conditions.
ARTICLE XXXVI. In addition to the business prescribed in previous articles, the Imperial Bank may, upon authorization from the Chancellor and the Minister of Finances, conduct the business deemed to contribute to smooth settlement of funds among financial institutions.
ARTICLE XXXVII. The Imperial Bank may, when necessary, buy and sell foreign exchange on its own account or as an agent handling national government affairs, and it may also buy and sell foreign exchange on behalf of foreign central banks, etc. or international institutions as their agent in order to cooperate with them as the central bank of Japan.
§ 1º. The Imperial Bank shall buy and sell foreign exchange as an agent handling national government affairs when the purpose of the buying and selling is to stabilize the exchange rate of national currency.
§ 2º. The Imperial Bank shall, when buying and selling foreign exchange on its own account or as an agent on behalf of foreign central banks, etc. or international institutions to cooperate with them as the central bank of Karnia-Ruthenia, conduct the buying and selling for the purpose which the Minister of Finances specifies as constituting cooperation in the field of international finance, at the request, or upon the approval, of the Minister of Finances.
ARTICLE XXXVIII. The Imperial Bank may conduct the following business with foreign central banks, etc. or international institutions in order to cooperate with them as the central bank of Karnia-Ruthenia:
a. Taking deposits pertaining to deposit money denominated in national currency;
b. Buying and selling national government securities in exchange for deposits received through the business set forth in the preceding item;
c. Taking safe custody of securities, precious metals, and other articles;
d. Carrying out intermediary, brokerage, or agency services for sales and purchases of national government securities conducted by the said foreign central banks, etc. or international institutions;
e. Other business specified by an ordinance of the Ministry of Finances as those deemed to contribute to the proper management of national currency or assets denominated in national currency held by the said foreign central banks, etc. or international institutions.
ARTICLE XXXIX. In addition to the business prescribed in the preceding Article, the Imperial Bank may conduct the following transactions and other transactions necessary for cooperating, as the central bank of Karnia-Ruthenia, with foreign central banks, etc. or international institutions in the field of international finance, including the provision of international financial assistance, at the request, or upon the approval, of the Minister of Finances:
a. Substituting loan claims against foreign central banks;
b. Providing credit to foreign central banks, etc. or international institutions.
ARTICLE XL. The Imperial Bank may not conduct any business other than that specified by this Act as the business of the Bank; provided, however, that this shall not apply to the case where such business is necessary to achieve the Bank's purpose specified by this Act and the Bank has obtained authorization from the Minister of Finances and the Chancellor.
ARTICLE XLI. The Imperial Bank may conclude a contract with financial institutions, etc. which would be the counterparty in such business (hereinafter referred to as the "counterparty financial institutions, etc." in this Article) concerning on-site examinations (examinations which the Bank carries out regarding the business operations and the state of the property of the counterparty financial institutions, etc. by visiting the premises thereof; hereinafter the same shall apply in this Article) (such contract shall meet the requirements specified by a Cabinet Order including those whereby the Bank shall notify and obtain prior consent from the counterparty financial institutions, etc. when carrying out on-site examinations).
ARTICLE XLII. The Imperial Bank shall issue banknotes.
§ 1º. The banknotes issued by the Imperial Bank as prescribed in this article shall be legal tender and hence shall be used for payment without limits.
§ 2º. The Minister of Finances shall decide the forms of Imperial Bank notes and publicly notify them.
ARTICLE XLIII. The Imperial Bank shall exchange, without fees, banknotes rendered unfit for further circulation due to defacement, mutilation, or other causes, pursuant to an Ordinance of the Ministry of Finances.
ARTICLE XLIV. The Imperial Bank shall determine the procedures for printing and canceling banknotes and submit those procedures to the Minister of Finances for approval. The same shall apply when making any change to the procedures.
ARTICLE XLV. The business year of the Imperial Bank shall run April 1 through March 31 of the following year.
ARTICLE XLVI. Every business year, the Imperial Bank shall make a budget for expenses (limited to those specified by a Cabinet Order as not hampering the currency and monetary control; hereinafter such budget shall be referred to as a "budget for expenses"), and submit it to the Minister of Finances for authorization before the business year begins. The same shall apply when making any change to the budget.
§. If the Minister of Finances finds it inappropriate to authorize the budget for expenses submitted as prescribed in the preceding paragraph, he/she shall make prompt notice to the Imperial Bank to that effect along with the reason therefor, and make public the details of the submitted budget for expenses and the said reason.
ARTICLE XLVII. The Imperial Bank shall prepare an inventory of property and a balance sheet for each six-month period running from April through September and from October through March and prepare a profit and loss statement for each business year as well as for each six-month period mentioned above, and submit these documents (hereinafter referred to as "financial statements") attached with Auditors' written opinions thereon to the Minister of Finances for approval within two months after the relevant six-month period or the business year has elapsed.
ARTICLE XLVIII. The Imperial Bank shall reserve, as a reserve fund, surplus resulting from the settlement of profits and losses for each business year.
§ 1º. Irrespective of the provisions of the preceding paragraph, the Imperial Bank may, when it finds it especially necessary, reserve the money which exceeds the amount prescribed in the preceding paragraph as a reserve fund, upon authorization from the Minister of Finances.
§ 2º. The reserve fund reserved as prescribed in the preceding two paragraphs shall not be disposed of, except to cover losses incurred by the Imperial Bank or to be appropriated for dividends as prescribed in the following paragraph.
§ 3º. The Imperial Bank may, upon authorization from the Minister of Finances, pay dividends to contributories out of the surplus resulting from the settlement of profits and losses for each business year; provided, however, that the rate of dividend payments against paid-up capital may not exceed five-hundredths per annum.
§ 4º. After deducting the amount reserved as prescribed in paragraphs 1 and 2 and the dividend payments prescribed in the preceding paragraph from the surplus resulting from the settlement of profits and losses for each business year, the Imperial Bank shall pay the remaining surplus to the national treasury within two months after each relevant business year ends.
§ 5º. The government may have the Imperial Bank make the payment to the national treasury for each business year as prescribed in the preceding paragraph, partially during the said business year, by estimate, pursuant to a Cabinet Order.
ARTICLE XLIX. The Imperial Bank shall, approximately every six months, prepare a written report on the Policy Board resolutions regarding the conditions of business operations that the Bank has conducted based thereon and submit it to the Imperial Diet through the Minister of Finances.
§ 1º. The Imperial Bank shall endeavor to explain to the Imperial Diet the written report set forth in the preceding paragraph.
§ 2º. The Imperial Bank's Governor or a representative designated by him/her, shall attend the sessions of the House of Peers or the House of Representatives when requested by them, in order to explain the state of the Bank's business operations and property.
ARTICLE XLX. When having received the approval regarding financial statements for each business year, the Imperial Bank shall prepare, without delay, an outline of its business operations for the business year and make it public along with the said financial statements and a statement of accounts for the said business year.
ARTICLE XLXI. The Minister of Finances or the Chancellor may, when he/she finds that the Imperial Bank, its officers or employees have violated or are likely to violate this Act, other laws and regulations, or articles of incorporation, request the Bank to take the measures necessary to rectify such acts.
§. When a request has been made from the Minister of Finances or the Chancellor as prescribed in the preceding paragraph, the Imperial Bank shall promptly take measures which the Policy Board finds necessary, such as rectifying the said acts, and report those measures to the Minister of Finances or the Chancellor.
ARTICLE XLXII. The Minister of Finances or the Chancellor may, when he/she finds it necessary in light of the conditions of the business operations of the Imperial Bank, request the Bank to submit a report or relevant materials.
ARTICLE XLXIII. In the case where the Imperial Bank has been dissolved, when the residual assets of the Bank exceed the amount of paid-up capital, the residual assets equivalent to the excess amount shall belong to the national treasury.
ARTICLE XLXIV. Cases concerning the appointment of special agents shall be under the jurisdiction of the Imperial Supreme Court which exercises jurisdiction over the location of the head office of the Imperial Bank.
ARTICLE XLXV. Those who have leaked or misappropriated secrets shall be punished in the terms of the law.
ARTICLE XLXVI. The Imperial Bank's officers or employees shall be punished by a non-penal fine when falling under any of the following items:
a. Having failed to obtain the authorization from the Minister of Finances or from both the Minister of Finances and the Chancellor, or the approval from the Minister of Finances, as required by this Act;
b. Having failed to make a report to the Minister of Finances or to both the Minister of Finances and the Chancellor as required by this Act, or having made a false report or used false materials;
c. Having failed to make public what is required by this Act, or having made it public falsely;
d. Having neglected to register in violation of a Cabinet Order;
e. Having been engaged in other work that brings remuneration or having carried out commercial business or other business for the purpose of pecuniary gain;
f. Having failed to keep the financial statements, the statement of accounts, or the Auditors' written opinions or having failed to make them available for public inspection;
g. Having failed to reserve a surplus as a reserve fund;
h. Having disposed of a reserve fund.
ARTICLE XLXVII. This law shall come into effect on 01 April 2018.
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Hofbau, 27 NOVEMBER 2O17. — His Imperial and Royal Majesty, the Emperor-King.
Hofbau, 27 NOVEMBER 2O17. — His Imperial and Royal Majesty, the Emperor-King.
