Sunday, January 24, 2010

North Dakota is the Only State in USA with Its Own Central Bank (Will Oregon be the 2nd?)

I bet you did not know that North Dakota has its own central bank. In fact, it is the only State in the USA with its own bank. I wonder if that is why North Dakota has the lowest unemployment rate in the country. If that is the reason for its low unemployment rate, then I would imagine that other States may try to get their own central banks like North Dakota in the near future.

About BND
Deposit Base

In contrast to most commercial banks, Bank of North Dakota (BND) is not a member of the Federal Deposit Insurance Corporation (FDIC). North Dakota Century Code 6-09-10 provides that all deposits in Bank of North Dakota are guaranteed by the state.

The deposit base of BND is unique. Its primary deposit base is the State of North Dakota. All state funds and funds of state institutions are deposited with Bank of North Dakota, as required by law. Other deposits are accepted from any source, private citizens to the U.S. government.

Policy and Governance

The state Industrial Commission oversees Bank of North Dakota, as mandated by the 1919 state legislature. Members of the Industrial Commission are the Governor, who acts as chairman, the Attorney General and the Commissioner of Agriculture of the State of North Dakota.

The Bank also has a seven-member Advisory Board appointed by the Governor. The members are knowledgeable in banking and finance. The Advisory Board reviews the Bank's operations and makes recommendations to the Industrial Commission relating to the Bank's management, services, policies and procedures.

Bill Bradbury, a Democratic gubernatorial candidate in Oregon, has stated that he will create a Bank of Oregon if elected. I have not been following the Oregon Governor's race, so I do not know if Mr. Bradbury is favored or if he is a longshot. However, as I said, I do not expect this to be the last time we hear a politician and/or a State proposing its own central bank. I wish them luck, because I would much rather have a State-central bank instead of some Bernanke-run Federal Reserve.

Bank of North Dakota

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