Banks and the Reserve System

The combination of the Reserve System, DAO Monetary Policy, the banking system, and the rules and algorithms for regulating the issuance and behavior of the banking system and users represents the macroeconomic model of the Juna project.

The Reserve System acts as a buffer that serves to replenish the liquidity of banks if they meet the requirements for their stability (which are set by the rules for reserving and capital adequacy). Also, the RS generates interest income on bank deposits placed with it. The volume of the RS does not directly participate in the circulation and does not have a direct connection with economic actors - users, their wallets, or Organizations (legal entities).

The increase in the size of the RS occurs due to the issuance of new tokens and the receipt of interest on loans issued to banks, and the outflow of funds occurs when paying interest on bank deposits placed, and in exceptional cases - when making discretionary decisions to transfer liquidity to the Launchpad and Ecosystem/Marketing funds.

The macroeconomy is in dynamic equilibrium and its parameters are adjusted based on the decisions of the DAO Monetary Policy, which analyzes the state of the economy and changes the settings of the system by voting.

The banking system serves to redistribute liquidity between the RS, participants who want to invest their money in a deposit, and participants who want to receive liquidity on credit. Banks are required to comply with the rules on stability and reservation of depositors' money, thus ensuring macroeconomic stability and protection against unfair behavior of banks and large token holders. Below are the main parameters and rules for regulating the macroeconomic model and the banking system.

Group	#	Parameter	Shortcut	Value	Formula	Public	Description
Reserve System	1	Reserve system	SYS			X	The system pool of tokens, replenished by a given emission of tokens and partially - unfreezing of initial funds
Reserve System	2	System Interest Rate	SYSIR	0,025	Voting	X	How much does the mass of tokens increase per year due to the emission of the system (from tokens in circulation) and what interest rate does RS want for borrowers
Reserve System	3	System Deposit Rate	SYSDR	0,020	Voting	X	How much does the mass of tokens increase per year due to the emission of the system (from tokens in circulation) and what interest rate does RS offers for deposits
System Bank & Balance Sheet	4	System Banks	B				Special ventures that can interact with RS by depositing and borrowing tokens.
System Bank & Balance Sheet	5	System Bank count	BCOUNT			X	Count of active System Banks, which depend on size of economy and increase after
System Bank & Balance Sheet	6	System Bank Appear Factor	SBAF	1,3	Voting		Empirical factor to calculate when a new System Bank will appear
System Bank & Balance Sheet	7	System Bank Appear Rule	SBAR		[ BCOUNT + ROUNDDOWN( Log(SBAF, Free_Tokens_Now / FreeTokens_Last_Period)) ]		Bank count increases according to the logarithmic law, with the base SBAF and the value equal to the ratio between the tokens in circulation for the current period and for the previous period
System Bank & Balance Sheet	8	Client	Client				Any member, wallet or smartcontract who interact with System Bank
System Bank & Balance Sheet	9	Client Deposits	BDEPO			X	Balance sheet parameter: A deposit, which Client give to System Bank, with commercial interest, for increase wealth or as collateral
System Bank & Balance Sheet	10	Loans	BLOAN			X	Balance sheet parameter: A loans that the Clients takes from System Bank, at a commercial interest for any cases
System Bank & Balance Sheet	11	Collateral	BCOL			X	Balance sheet parameter: Amount of tokens, which Client give to System Bank as collateral for borrowing a loan
System Bank & Balance Sheet	12	Interest-bearing Deposits	BIBD			X	Deposits of bank funds in RS (with SYSDR interest), other banks or financial services
System Bank & Balance Sheet	13	Borrowed funds	BRRW			X	Balance sheet parameter: A System Bank's loan from RS with interest rate if SYSIR, and from non-RS entities with commercial interest
System Bank & Balance Sheet	14	Securites*	BSEC			X	Balance sheet parameter: Special NFTs, or tokens, represent the value of shares in virtual companies, NFTs of art, rights, and patents. (under construction)
System Bank & Balance Sheet	15	Bank Own funds (Tier I)	BOWN		[ BWBAL - (BDEPO - BRR) ]	X	Balance sheet parameter: How many own free tokens System Bank have
Reservation mechanics & capital adequacy	16	Reserve requirement ratio	RR	0,1	Voting	X	How many tokens from client deposits can the Bank use to issue new loans
Reservation mechanics & capital adequacy	17	Required reserves	BRR		[ BDEPO x RR ]	X	A System Bank's deposit with RS, with interest rate of SYSDR, represent required reserves in Bank balance sheet
Reservation mechanics & capital adequacy	18	Reserve system loan ratio	SYSLR	0,25	Voting	X	Ratio represented which amount tokens might be borrowed from RS, depend of actial size of RS
Reservation mechanics & capital adequacy	19	Reserve system loan limit	SYSLL		[ SYS x SYSLR ]	X	Summ of all Bank can borrow must be less than SYSLR of token mass, availaible in RS
Reservation mechanics & capital adequacy	20	System Bank loan limit	BLL		[ IF BCOUNT>2 THEN BCL= SYSCL/(BCOUNT-1) ELSE BCL=SYSCL/BCOUNT ]	X	Here is the problem when the second bank appears: BLL is not enough, another solution is needed
Reservation mechanics & capital adequacy	21	Reserve system coverage ratio	SYSCR	0,25	Voting	X	Ratio represented which amount tokens might be deposited in RS, depend of actial size of RS
Reservation mechanics & capital adequacy	22	Reserve system coverage limit	SYSCL		[SYS x SYSCR]	X	Summ of all Bank required reserves must be less than SYSCR of token mass, availaible in RS
Reservation mechanics & capital adequacy	23	Bank coverage limit	BCL		[ IF BCOUNT>2 THEN BCL= SYSCL/(BCOUNT-1) ELSE BCL=SYSCL/BCOUNT ]	X	If second, third ect bank appears BCL will not enough, temporary removed
Reservation mechanics & capital adequacy	24	Reserve system insurance ratio	SYSIR	0,1	Voting		How many tokens will be returned to client in case of Bank bankrupcy - this amount of tokens will be deposited by Bank in reserve system, obligatory or extra
Reservation mechanics & capital adequacy	25	Reserve system insurance limit	SYSIL	0,1	[ SYS x SYSIR ]		Having connected the banking mechanism of reservation to the Reserve System, the need for additional insurance of Clients' deposits has actually disappeared
Reservation mechanics & capital adequacy	26	Bank Multipicator	BM	0,5	Voting		A special factor depending on the quality of bank management, leverage and police risks. Has an upper value, but the bank itself can lower it
Reservation mechanics & capital adequacy	27	Common Equity Tier1 ratio	BCET1		[ BOWN / (BLOAN+BIBD+BRRW+ BSEC) ]	X	In our case, capital adequacy depends only on BOWN. No tier 2 capital, only tier 1 capital.
Reservation mechanics & capital adequacy	28	Common Equity Ratio Treshold	BCET1T	0,1	Voting	X	This is the minimum capital adequacy ratio. If the Bank does not support this level, the license will be revoked after 30 days.
Loans & Deposits	29	Bank excess reserves	BEX		[ BDEPO + BRRW + BCOL + BOWN - BRR ]	X	Available number of tokens for issuing a loan
Loans & Deposits	30	Moneymaker multiplicator	MM	10	[ 1 / RR ]		Indicates the possibility of creating new money through bank loans with regulatory restrictions.
Loans & Deposits	31	Moneymaker leverage	ML		[ MM x BEX ]	X	How many tokens Bank can issue as credit (potentionaly)
Loans & Deposits	32	Client Loan Treshhold Rule	CLTR		[ (VALUE<BEX] & [VALUE x RR > BCL] & [BCET1>BCET1T ]		Verification rule when concluding a loan agreement
Loans & Deposits	33	Maximum deposit amount	BMDA		[ OWN x BCET1 x BM ]		How many tokens can a bank accept as a deposit without violating its stability
Loans & Deposits	34	Client Deposit Treshhold Rule	CDTR		[ BCET1>BCET1T ] & [ VALUE< (BMDA-BDEPO) ]		Verification rule when concluding a deposit agreement
	35	Bank Wallet Balance	BWBAL		obtained from blockchain / wallet		Current number of tokens in banks wallet

Forecast of the structure of money supply by sources