Kalistan

[Doc]

Finance Minister talks about new Tel Bira Bank
"Geopolitical considerations at play here," says King
Kaliburg, Grand Duchy of Ananto
August 20, 5666


Dr. King says new Tel Bira bank system is "good system that flounders upon geopolitical shoals"

Her Imperial Majesty's Finance Minister, Dr. Michael King, said he has the opportunity to review details around the new Tel Bira Banking system which proports to provide a medium for monetary, stock and commodities exchange. He says that it is unlikely that Kalistan will initially support the system, but doesn't put the idea down in a measured statement. The Minister spoke on Radio Kaliburg's Finance Hour show, which was broadcast all over Kalistan, was streamed live in rka.ks and beamed via satellite into receivers around the world.

"It seems fairly sound," said the Finance Minister. "The bank at Tel Bira is actually several banks, which themselves don't have a lot of stake in the transfers that go through them. Instead, they act more as guarantors and a pass-throughs that make their money from service fees charged to members. It seems pretty straight forward and transparent. If Bank A and Bank B are in two different countries, and each have their own regulations, restrictions and fees, this Bank C in Tel Bira can smooth out the transaction between the two, so Bank A and Bank B do not have to worry about compliance, exchange rates or whatever. It makes international Bank-to-Bank transactions much simpler, guarantees transfers to some certain amount, and reduces both risk and marginal fees for all users. Tel Bira takes their cut, which seems to be paid by the sender, everyone is happy. And meanwhile, they re-establish the credibility of the financial system in Amudim, specifically Tel Bira."

But as he was explaining this new system, there was a hint of hesitation in his explication. When pressed, the Finance Minister said it would likely not be something that Kalistan would join. "Well: We have our issues with the City States in Amud... excuse me, with Beiteynu. The system asks signatories to place their trust in the Banking system of Tel Bira. But I don't need to remind everyone that Amudim has owed billions to large institutional creditors around the world. I wonder if they thought we would all forget about those loans, which, I'm not sure whether they are still outstanding or if they have been repudiated or what... I don't know? have the been repaid? I don't know... My point is: Beiteynese interests have made their money serving as the middleman, putting very little of their own skin in the game while leveraging everyone else so that only they actually come out ahead. Very shrewd, but you can't expect Kalistan to help to lend credibility to that activity or to help them prosper when they have historically been the source of misery for everyone else."

The Finance Minister added, "Look: the plan and the details in the treaty show a solid business plan. Any liberal nation interested in free movement of capital around the world should at least be interested in this treaty. The fact that those trying to trade with that kind of ease should have no problem with Tel Bira collecting a toll for passing through its institution: after all Tel Bira bears some risk as well. The exchange rates of some of the less convertible are gonna eat into their profitability a little bit, but the math isn't that hard: the service fees will cover those losses too. It's not complicated. But then again, Kalistan is not a liberal economy: We protect our currency here, and don't care to share the risk with an institution in a foreign country that Kalistan neither trusts, nor particularly wants to encourage. This is a pretty good system that flounders upon geopolitical shoals."

The Finance Minister suggested there might be an opening for cooperation with Tel Bira, were that bank to invest into an institution that Kalistan controls, like the ForIn Bank. "We could help them mitigate some of their costs with buying and holding foreign currency," said Minister King. "Our ForIn bank Charter caps exchange service fees at 1%, which is lower than any cambio, who usually charges between 2.1% and 3.6%, depending on where you are exchanging--worldwide, the fee is often much higher than that even. But cooperation would require Tel Bira to have confidence in Kalistani institutions too, enough to see the upside to doing business with us. In other words, it wouldn't be just a one way street. I think the Tel Bira system will be fine with or without Kalistan. But trust goes both ways, and right now I think there is a deficit in trust on both sides that will preclude any deeper relationship between Kaliburg and Tel Bira."

The definitiveness of the Minister's statements suggest they represent the official stance of Her Imperial Majesty's Government, which we can also assume mean that they were vetted and approved by Her Imperial Majesty herself.

@TheRepublic