Prime Rate
From Rise: The Vieneo Province
Prime Rate Determination
The Vieneo Prime Rate is a floating daily interest benchmark established by Veridian Bank to guide lending and credit products throughout the colony. It reflects the current liquidity stress of the banking system—rising as available capital tightens and falling when reserves are ample.
Calculation Model
Veridian's system calculates a utilization ratio based on total outstanding loans versus lendable funds after reserve requirements:
<syntaxhighlight lang="csharp"> var lendableFunds = VeridianBank.cashbalance * (1m - ReserveRequirement); var utilization = totalOfLoansOutstanding / lendableFunds; utilization = Math.Clamp(utilization, 0f, 1.5f); primerate = MathF.Round(2f + utilization * 10f, 2); // 2–17 % </syntaxhighlight>
This produces a smooth, self-balancing prime rate that naturally rises as Veridian approaches its lending capacity.
Utilization Curve
| Utilization (Loans ÷ Lendable Funds) | Approx. Prime Rate (%) |
|---|---|
| 0.0 | 2.00 |
| 0.2 | 4.00 |
| 0.4 | 6.00 |
| 0.6 | 8.00 |
| 0.8 | 10.00 |
| 1.0 | 12.00 |
| 1.2 | 14.00 |
| 1.5 (stress condition) | 17.00 |
Interpretation
- **Low utilization (< 0.5)** — credit is abundant; Veridian lowers rates to encourage borrowing.
- **Moderate utilization (0.6–0.9)** — typical healthy range; normal vehicle and land loans originate here.
- **High utilization (≥ 1.0)** — capital is tight; prime rate increases sharply to discourage new lending until deposits recover.
Adjustment Cycle
The prime rate is recalculated once per local day and rounded to two decimal places. Temporary policy offsets by the Vieneo Financial Authority (VFA) may add or subtract up to ±0.50 % to stabilize colony-wide economic activity.