19th Century Humanities
Meliora Brightel Bankruptcy 1/24/11 
Immediate Response

              The Government of Meliora is regrettably here to deliver unfortunate news. The Bank of Brightel announced its closure on Saturday, January 24th, 2011 due to a huge bank-run and overdue debts. The Government of Meliora has, with much effort, come up with a solution, firstly, the Government has ordered the bank to file for Chapter 11 Bankruptcy, and to sign off the bank into government property. The government will take a three-step approach at dealing with this crisis and would like the citizens to be fully aware of the situation, however, to also remain calm. Thank you for your cooperation.

Meliora Brightel Bankruptcy 1/24/11 

Damage Assessment

                The Bank of Brightel’s bankruptcy has three primary causes that led to it becoming a national crisis. One of the first causes to consider is the nation not being able to handle the unpaid debts that made the major bank incapable of sustaining itself. Massive increases in public debt were accumulated because of long years of budget emergency that leads to the Meliora government spending more money than it received. Meliora’s major bank suffered from this significant impact that it can no longer liquidate its assets. Secondly, the Bank of Brightel has the history of charging extremely high interests, and it may have been subtle due to its reputation of being the most reliable bank in Meliora; however, many of the clients of the Bank of Brightel was unable of paying back the debts because of its high interest imposed on them. The beginning debt, while seemingly quite small, has increased due to the compound interest effect that added substantially to create an amount too big to be dealt with. Lastly, the most prominent reason includes high unemployment among the citizens in Meliora. The high unemployment rate has led to a decrease in interest revenues, which caused the bank incompetent in handling the affairs of creditors asking for repayment because of not being able to refinance their debts.  With the Bank of Brightel being almost as large as the Government of Meliora, institutionally, the government also furthermore relies on the bank. Unfortunately, it had resulted in an absolute free-fall for the Bank of Brightel with it not being readily available for making fresh loans.
               A single bankruptcy could impact a nation’s reputation around the world, which in turn impacts its ability to acquire credit. Opportunities of Green Garden regarding Meliora as a country with reliable economy will be needing time to be gained back. More directly, since the Meliora government is partially dependent on the Bank of Brightel to sustain the citizens, it will then be restricted to undertake public works projects to provide for its citizens, destabilizing both the government and the people.  On the other hand, the citizens will feel the impact indirectly through even higher unemployment than previous and the sudden decrease of Meliora’s services and benefits. Nonetheless, the Meliora government has come up with a long term plan to assist the crisis in response to the solutions for the bankruptcy and to moreover bring back the perseverance and maintenance of the country Meliora.

Meliora Brightel Bankruptcy 1/24/11 
Long-term response plan

Committee: Melioran Department of Finance
Issue: Closure of The Bank of Brightel
Main submitter: Meliora
Co-submitters: Atlantica
Having heard of the closing of The Bank of Brightel on Friday, March 6th, 2011,
Noting with deep concern Meliora’s need to file for Chapter 11 Bankruptcy,
Guided by the laws and features of Chapter 11 and Chapter 13 Title 11 Bankruptcy,
Keeping in mind the Melioran country’s imperative urgency for a monetary reform,
Fully alarmed by The Bank of Brightel’s history of high interest and its need for rehabilitation,
Taking into consideration possible solutions from past resolutions derived from the Panic of 1819, Panic of 1857, Panic of 1873, Panic of 1884, Panic of 1890, Panic of 1893, Panic of 1896, Panic of 1901, Panic of 1910-1911, and The Great Depression, the Wallstreet Crash of 1929, and the Chinese correction of 2007,
Expressing its appreciation for fellow Melioran citizens and other distinct countries for their communion, cooperation, and assistance ad infinitum,
1. Encourages the Melioran state to file for Chapter 11 Bankruptcy and an adoption of allotments through means such as  but not limited to:
        a. Cessation of business enterprises and transactions,
                    i. Providing alternative and interim jobs for subjects in the firm,
                    ii. Distributing payment/salaries up to the current month via loans from the government,
        b. Selling of all assets through a trustee,
        c. Reorganisation of the debtor’s personal assets and debts,
                    i. Distributing the enterprises’ proceeds to its creditors,
                    ii. Assurance and verification of the returning of any residual amount to the proprietor,
2. Recommends all member states to support reinforcing and improving economical and scientific investigations and/or economy-related programmes with ways such as but not limited to:
         a. Arranging biannual meetings from international economists, economical consultants, political consultants, businessmen, leaders of business corporations, accountants, theorists, labour economists, econometricians, economic journalists, and financial analysts to prevent faults in calculations of national finances and predictions of the nation’s wealth,
         b. Ensuring comparisons with other nations of economical statistics such as but not limited to:
                   i. Comparisons of economic indicators, unemployment rate, quits rate, housing starts, Consumer Price Index (a measure for inflation), Consumer Leverage Ratio, industrial production, bankruptcies, Gross Domestic Product, broadband Internet penetration, retail sales, stock market prices,money supply changes,
        c. Ensuring a systematic review of statistics, reports, theories, and observations,
        d. Keeping up with data pertaining to the studies made in Meliora and other nations,
        e. To continue, examining, and collecting data global-wise on hypothetical theories pertaining to change in economy.

Military and Police

            The bankruptcy of the Bank of Brightel will exceedingly affect the financial branches of maintaining the Military and Police of Meliora. Melioran government should allocate less percentages of the national budget to national defense compared with the numbers of percentage before the bankruptcy was announced. Melioran government cannot sidestep the situation by carrying out a large-scale restructuring; instead, the Melioran government should be managing the problem by requesting help from the World Bank, though it might be against Melioran citizens’ wishes in constructing a more independent society. Nevertheless, Melioran government should be operating this condition by first lowering the percentage in the investments in military and police to increase the budget for future recoveries, the budget of which may include paying back to the International Monetary Fund (IMF) beforehand. To sum up, the Melioran government shall consider the fact that Military and Police has been entailed with unneeded attention that should now be shifted and diverted into the topic regarding the recently filed bankruptcy.


             The Melioran Economy may be extremely ruined by the Melioran national Brightel Bankruptcy. Needless to say about worse relationships with other countries, foreign investors definitely withdrew funds from the foreign exchange holding which is managed by the International Monetary Fund. By massive amounts of withdrawal from Melioran exchange holding, the main Brightel Bank couldn’t help to face to the bankruptcy. An economy of a country is the system according to which the money, industry, and trade of a country or region are organized. The bankruptcy causes the acute effects on Meliora. Since economy can not be activated, trading activities which would have been highly based to the Economy of Meliora can not be activated. It is expected for Melioran citizens to cooperate with the Melioran government for seeking solutions to overcome the economic crisis. With great efforts of Melioran citizens, It is predicted to have smooth trading with other countries for obtaining of foreign money. The Melioran government encourages Melioran citizens to be cooperated with various campaigns under the leading of civic groups. The government of Meliora would clearly like to introduce the greatest campaign for causing exportation called “SSRR(Save, Share, Replace, Reuse).” The government of Meliora strongly expects to make this campaign a way of life.

Internal stability

                Taking the official report of the Bank of Brightel’s bankruptcy into consideration, its internal stability is markedly insecure. Due to the fact that the report has been warrantably made to notify Meliora citizens, Melioran currencies and stocks have began to decrease apace. On the other hand, partial banks in the rest of Meliora has been influenced yet only on a few matters. To make the solutions and plans effective, the Melioran government will be enforcing the “Currency Reform”. The “Currency Reform” is originally rooted from the Monetary Reform. Monetary Reform is accounting reform that reaches more deeply into banking central bank, money supply and the monetary policy; it affects how money is created and destroyed, and what constitutes a reliable measure of economic growth and measures of national income.The purpose of Melioran currency reform is to obstruct devaluation of Melioran currency by inflation, and by doing this, the Melioran government will preferably change the currency design and the monetary unit as it’s foremost step---- Melioran new coins will be put in circulation. The figure of new currencies’ Seigniorages will linger in causing low interest compared to before this crisis. However the reforemed currencies will still have values.
Nevertheless, Meliora will enforce the Currency Reform for stable internal-economy of Meliora.

Foreign policy and international relations

          By the bankruptcy of national Brightel Bank, foreign investors will not invest with an image of distrustful Meliora. Foreignly, Meliora loses extremely enormous amount of the credibility. Meliora can not afford to compensate to foreign investors.On that senses, the relationships with other countries will be close to hostile relationship. It is expected to be hard for Meliora to be in amicable relationships on financal deals with other countries. The best way for us to recover is to expand the foreign exchange reserves to be get to an adequate amount of foreign exchange holdings.  That means to say, Melioran citizens must be able to earn large amounts of  foreign currencies. Melioran citizens are forced to earn for better economy of Meliora.

Concerns of Customer Deposits

             In response to a dramatic bank run by customers of Bank of Brightel, the Melioran government have devised a plan to install all of the money and assets within the bank control under the Melioran government name. Deposits of Meliora citizens will be temporary “frozen” under the Meliora Government, and small withdrawal can be made. Further investment will be discontinued under the control of the Melioran Government until the Bank of Brightel regains control of its economical assets.