Grade privilege
Note privilege is the exclusive authority of an institution, banknote issue to be allowed.
General
All over the world, states make use of their sovereign right through currency laws or banking laws to grant a state institution (usually the central bank ) the right to issue legal tender for the purpose of payment transactions . These legal tender are then the banknotes and coins of a state that are required by law for the legally effective fulfillment of obligations and are circulating in large quantities. The state "had through its legislation ... in the hand to stipulate what should be used as a means of payment in exchange transactions ..." With a legal tender "everyone has to be satisfied if he has been paid in it."
history
The first German card bank was on June 17, 1765 by Heinrich IX. Count von Reuss founded in Berlin as a royal bank and granted banknote privilege on October 29, 1766. In Section 16 (1) of the Banking Act of March 14, 1874, the banknote privilege in the German Reich was finally transferred to the Reich. After this law was passed, 13 German regional central banks waived their privilege to issue banknotes. The remaining four central banks lost their privilege by law of December 18, 1933.
For a long time the Banque de France did not have the sole banknote privilege in France, but from 1803 only for Paris. It was not until March 15, 1848, when the banknotes of the Banque de France received a compulsory exchange rate for all of France, that the other banks were weakened, so that the Banque de France received a sole note privilege from 1863.
In the Netherlands, the issue of banknotes had been the monopoly of the Dutch central bank since 1863, which was not legalized as De Nederlandsche Bank as a central bank until 1948 .
In Hong Kong , banknotes ( Hong Kong dollars ) have not been issued by the central government since 1872, but by three commercial banks ( Hong Kong and Shanghai Banking Corporation - HSBC, Standard Chartered Bank ) and (since 1994) the Bank of China , which is unusual and worldwide is unique. Since the Currency Ordinance of November 9, 1935, these banks have been declared legal tender banks by the Hong Kong Monetary Authority (HKMA) . The banknotes can differ in design and color depending on their face value, as each of the three banks can choose its own design. The HKMA is thus the actual (but not the formal) central bank in Hong Kong, which has delegated the banknote privilege to three commercial banks.
Effects of the grade privilege
With the banknote privilege, the state uses its sovereign task to determine and organize the currency of the state within the currency constitution and to prescribe certain means of payment. The resulting obligation to accept for creditors can be unlimited (for banknotes) or administratively restricted (in most countries there is a limited acceptance requirement for coins). The exercise of the banknote privilege has an impact on the money markets and also in the entire economy , because the issue of additional banknotes increases the amount of money and can thus have an inflationary effect and vice versa. For these reasons, the state usually only grants the banknote privilege to one institution, to which it at the same time transfers the design of monetary policy .
The banknote privilege is not a static task that would only consist of replacing worn banknotes with new ones. Rather, central banks use their banknote privilege to provide the economy with sufficient cash through an elastic money supply. If the cash supply is too tight, economic activities can be slowed down by liquidity bottlenecks. This carries the risk of deflation and unemployment and vice versa. Apart from these economic implications, there are seasonal fluctuations in cash requirements over the course of the year, which increase in particular in terms of wage and salary payment dates, tax dates, in summer and at Christmas. The central bank must take this into account by fine-tuning the money supply.
The task of maintaining the quality of cash is derived from the banknote monopoly. This includes the removal of counterfeit money and the replacement of damaged coins and banknotes.
Banknote privilege in the euro zone
In Art. 128 para. 1 TFEU stipulates that the ECB has the exclusive right to issue euro banknotes within the EU to approve and, together with the national central banks may issue such notes is justified. The delegation of the issuing right to the Deutsche Bundesbank can be found in section 14 (1) sentence 2 BBankG . The issuing of euro coins is the responsibility of the member states (Art. 128 (2) TFEU). The euro banknotes issued are the only unlimited legal tender and are shown on the liabilities side of the central bank's balance sheet. This shows that banknotes are a requirement of the central banking system.
In all states, the legal tender is associated with an obligation to accept for the creditor. He has to accept an unlimited number of euro banknotes across the EU as fulfillment of his monetary claim. In Germany, "Euro-denominated banknotes are the only unrestricted legal tender" (Section 14 (1) sentence 3 BBankG).
Other states
There are similar regulations on the grade privilege in all other countries. The US dollar is specified in Title 31 Section 5112 of the United States Code (USC) as the legal tender for all debts (Section 5103). According to Article 2 of the Federal Act on Currency and Means of Payment (WZG) , the Swiss franc is the legal tender in Switzerland, as is sight deposits denominated in francs at the Swiss National Bank . While there is no limit to the acceptance of Swiss franc banknotes, the obligation to accept coins is limited to 100 (Art. 3 WZG). The banknotes issued by the Bank of England are "legal tender" only in England and Wales under Chapter 12 Section 1 (2) of the Currency and Bank Notes Act of February 10, 1954.
See also
Individual evidence
- ↑ Robert Millbrandt, History of Economics , 1924, p 59th
- ↑ Holger-René Bruckhoff, On the development of central banks and banking supervision in Germany , 2009, p. 15 f.
- ↑ Hans-Joachim Arndt, Politics and Expertise in Credit Currency , p. 86.
- ↑ Holger-René Bruckhoff, On the development of central banks and banking supervision in Germany , 2009, p. 149.
- ^ Money , Discover Hong Kong, accessed October 10, 2013.
- ↑ Ricarda Kampmann / Johann Walter, Macroeconomics: Growth, Employment, Foreign Trade , 2010, p. 62.
- ↑ Claus Köhler, Der Geldkreislauf: monetary theoretical theses im Spiegel der Empirie , 1962, p. 57.
- ^ Otmar Issing, Introduction to Monetary Policy , 1993, p. 8 f.
- ^ Cornell University Law School, USC 31 § 5112
- ↑ Federal Act on Currency and Means of Payment (WZG)
- ↑ Currency and Bank Notes Act 1954 on Legislation.gov.uk (English; PDF, 73 kB)
