Private Banking
Finance corporations can charter a private bank when the world flag is on. A bank takes deposits, lends against a reserve requirement, posts rates inside a corridor set by the central bank, and can fail. This guide covers charters, rates, deposits, loans, runs, insurance, and proprietary trading.
Open World > Banking to choose a currency and compare chartered banks. Bank owners manage the charter from their corporation page. The country's central-bank page is the public source for prime rate, reserve policy, insurance, and the rate corridor that private banks must obey.
Charters and the separation law#
A corporation that owns at least one financial sector may issue exactly one bank charter. Chartering posts minimum capital from the corporation treasury (scaled by era and currency) and is automatic once the objective gates pass: financial sector ownership, legal charter type, matching treasury currency, and enough cash.
Charter types:
| Type | Deposits | Lending book | Prop trading |
|---|---|---|---|
| Retail | Yes | Yes | No |
| Investment | No | No | Yes |
| Universal | Yes | Yes | Yes |
Most nations start with a banking separation law that allows retail or investment, but not universal. A bill can switch the country to universal charters. Command economies do not offer private bank charters.
The central bank chair (or an admin) can revoke a charter. A revoke is not a delete: it runs the same wind-up every other ending runs. Household deposits go back into circulation out of the bank's own cash, player savings pointers return to the central bank with their balances untouched, and only what is genuinely left over, capped at book equity, is paid up to the owner.
You can also change charter type yourself from the bank console, without re-chartering or posting capital twice. Moving to a charter that cannot take deposits returns the whole deposit book, and any switch locks the type for 24 turns.
Capacity allocation (no double count)#
A chartered financial sector's capacity does one job or the other:
- Branch share runs the deposit network and sets the deposit ceiling.
- Commodity share produces financial services for the commodity market.
The CEO sets the branch share between 10% and 90% (default 50%). Without this split, the same capacity would earn twice and chartering would dominate every other use of a financial sector.
Rates and the corridor#
Retail and universal banks set deposit and lending offsets against the central bank prime rate. Offsets must sit inside the Regulation Q style corridor for that country and era. Historical worlds often cap deposit rates below prime and floor lending rates above it. Investment charters do not set deposit or lending offsets.
Effective rates are floored at small positive minima so a zero or negative quote cannot clear the market for free.
Deposits and the insured cap#
Banks attract NPC household deposits from the central bank's external broad money pool, competing on deposit rate versus the central bank savings APY. Players can move their savings pointer to a private bank (one holder per currency).
The two kinds of deposit are not the same thing#
This distinction drives almost every number in the console, so it is worth reading once:
- Household (NPC) deposits are cash. Taking them moves real money out of the central bank's pool and into your vault. They are a liability you owe, they sit in your reserve requirement, and returning them moves cash back.
- Player savings are a pointer. The balance never leaves the player's account; only the label saying who holds it changes. No cash arrived, so player savings are not in your reserve requirement, not in your equity, and not something your bank can lose.
The deposit ceiling has two halves#
deposit ceiling = min(branch capacity ceiling, book equity x 12)
The branch half is financial-sector capacity allocated to branches. The equity half is the leverage limit: a bank may anchor at most twelve times its book equity in household deposits, so a bank with no capital cannot anchor a deposit base it does not stand behind. The console names which half is binding. If equity binds, building more branches will not move the ceiling; posting capital will.
NPC inflow stops at the ceiling; outflow is always allowed. Player balances already above the ceiling are grandfathered, but the bank cannot accept new player deposits that would push further over.
Each currency has a deposit insurance fund with an insured cap (era and FX anchored). The fund stands behind the household book: if a failed bank cannot return the household deposits it holds, the fund covers the gap and the Treasury covers what the fund cannot. Player savings are not haircut on a failure, because the bank never held that cash. What a player loses by banking with a bank that fails is the yield and the counterparty, not the principal.
Loans#
Deposit taking banks lend:
- An NPC bulk book sized off regional GDP and the lending rate (higher rates mean less volume and a worse credit mix).
- Named player loans to characters and corporations. Character loans credit personal cash in the loan currency immediately (not savings). Corporation loans credit that company's liquid capital. Proceeds never appear in the banking hub savings list; open loans are listed under Your accounts, with the destination named.
Principal is the lowest of three numbers, shown on the form: the lending bank's cash reserves (the ring-fenced bank vault, not the holding company's liquid capital), leftover deposit headroom after the reserve requirement, and 35% of demonstrated per-turn income after existing private-bank payments. That cap is not bond issuance headroom. A corporation with a large bond programme can still be refused a private-bank loan if the bank's vault or the borrower's income cannot support it.
Reserve requirements set by the central bank limit how much of the deposit base can be lent. Banks may blacklist corporations, characters, and every constituent of a named index fund.
Runs and the warning badge#
Each solvency pass scores the bank on reserves, capital, and loan losses. The score maps to a published warning band:
| Band | Meaning |
|---|---|
| Green | Healthy |
| Amber | Stress; players see the warning one turn before NPC flight intensifies |
| Red | Failure path |
NPC deposits flee in proportion to low confidence. A failed bank can raise panic at peer banks in the same currency when contagion is enabled. Contagion and prop trading each have independent kill switches under the master private banking flag.
The run line#
Failure needs two things at once: a red band, and cash below the run line.
run line = 0.5 x required reserves
required reserves = household deposits x reserve ratio
The console shows both numbers and your distance to the line. A red band with cash above the line does not fail the bank; cash under the line with a green or amber band does not either. That is one turn of notice, on purpose.
Insurance#
Chartered banks pay a per turn premium on insured deposits, risk weighted by how thin their reserves are versus the required ratio. Premiums fund the national insurance pool. Payouts come from the fund first; a drained fund is covered by the Treasury and lands in the federal budget.
Prop trading#
Investment and universal charters (when the prop trading kill switch is on) run a proprietary book in equities, bonds, index units, and forex. Positions are marked each solvency turn. Funding comes from:
- The interbank market: retail banks may lend part of their non reserved deposits to investment banks at a negotiated rate.
- A central bank margin line against posted collateral at prime plus a spread.
The prop book is capped at three times the desk's equity, and any single forex currency may be at most 50% of prop-desk equity. It is not measured as half of the forex sub-book. Borrowed money is never capital: drawing on the margin line or the discount window raises cash and debt together and leaves the capital ratio unchanged.
Forced liquidation feeds the confidence score. Flag off freezes prop and interbank actions without unwinding existing books.
Capital requirements and supervision#
The warning badge and the run mechanic are the market disciplining a bank after the fact. Supervision is the regulator disciplining it before.
Your bank's capital ratio is its capital — posted capital plus the corporation's own free cash — divided by its risk assets, meaning the loan book plus any proprietary book.
| Test | Requirement | What failing costs you |
|---|---|---|
| Minimum | 8% capital ratio | Recapitalize within 12 turns or the charter is revoked |
| Stress scenario | 6% after a 15% loss on the book | No distributions and no new proprietary positions until fixed |
The stress scenario is published and fixed. The supervisor assumes 15% of the book defaults at once, absorbed by capital. There is no dice roll: you can compute your own result before the regulator does, which makes the requirement something to plan against rather than a periodic surprise.
Two thresholds, not one. A single line would make supervision binary — fine one turn, dead the next. Failing the stress test does not endanger your bank and does not touch your charter; what you lose is the right to pay yourself. A bank that cannot survive a downturn on paper does not get to distribute in the meantime. Falling below the minimum is the serious one, and it starts a clock.
Recapitalizing moves cash from the corporation into the bank's posted capital. It is the same balance sheet, but a different claim: posted capital absorbs losses before depositors do, and cannot be spent on anything else. The interface tells you the exact amount that cures the breach.
Missing the deadline revokes the charter — it does not fail the bank. Those are different outcomes and the difference matters to your depositors. A failure means the bank ran out of money to pay them, and they take a haircut above the insured cap. A revocation means the regulator pulled the licence of a bank that would not recapitalize; the book is unwound in an orderly way and posted capital is returned. Depositors should not be punished because an owner ignored a deadline.
A bank that cures a breach and later breaches again gets a fresh 12 turns. The clock tracks the current breach, not your history.
The discount window#
When a bank cannot fund itself, the central bank will lend to it. That is what a lender of last resort is for, and until now no such facility existed: a deposit-taking bank facing a run could sell assets into a falling market, or it could fail.
The window is open to retail and universal charters only. An investment bank has no depositors to protect; its facility is the collateralized margin line.
| Rate | Prime + 3 percentage points |
| Limit | 25% of the deposit base |
| Cost beyond the rate | A confidence penalty while the debt is outstanding |
The stigma is the mechanic. A cheap facility with no consequence is free money, and every bank would sit on it permanently. Borrowing from the lender of last resort is a signal: the market reads it as a bank nobody else would lend to. So drawing lowers your confidence score, which feeds the same run mechanic the window is helping you survive.
That is the real trade-off. The window funds you through a run and makes the run marginally more likely. It is a decision, not an obvious yes.
The penalty scales with how much of your limit you have used, not the raw amount — a small bank at its ceiling is in more trouble than a large one borrowing the same sum against a much bigger book. It decays as you repay, so a bank that uses the window briefly and clears it is not marked forever.
The limit is deliberately low. The window is a bridge across a liquidity shortfall, not a funding source. A bank that needs more than a quarter of its deposit base is not illiquid, it is insolvent, and resolution is the right answer rather than a bigger loan.
Interest is serviced each banking turn on the same terms as the margin line: paid to the central bank, and any shortfall accrues as arrears against your headroom, so a bank that cannot service the facility loses access rather than borrowing its unpaid interest indefinitely.
Drawing creates money at the central bank; repaying destroys it. Both legs are ledgered.
Related#
- Central Banks: prime rate, reserves, and money supply.
- Savings & Interest: central bank savings APY and accrual.
- Line of Credit: character borrowing from the central bank.
- Stock Market: equities the prop book can hold.
- Index Funds: fund units and blacklist constituents.
- Corporations: founding and running financial sectors.
- Running a Corporation under the Plants System: capacity, cash flow, and debt discipline.