Negative interest rate
A negative interest rate monetary policy is imposed by Illuminatia's Office of the Central Bank (OCB) as a technique intended to encourage more-even distribution of wealth in the Illuminatian economy and discourage wealth hoarding. The negative interest rate has stimulated investment in business, jobs, and infrastructure while deterring accumulation of excessive idle monetary wealth.
Under the OCB's system, wealth in monetary form that sits idle in the long term loses value as it is assessed interest, while wealth that is in a fluid state of redistribution is not affected by the negative interest rate.
The negative interest rate is effectively progressive in relation to the non-fluidity and magnitude of monetary assets in Monetary Network accounts. Due to the application of negative interest rate monetary policy by the OCB toward only top-tier banks which directly interact with the Central Bank, small amounts of money of the sort that a personal account would keep as operational liquid cash on hand do not see the effects of the negative interest rate, as their lower-tier banks do not pass on this interest to them; meanwhile increasingly large sums of institutional wealth may sit idle for longer periods and will be held closer to the top tier of banks and therefore be subject to a more negative interest rate applied by these banks. This allows individual citizens of limited means, for example, to accumulate the necessary wealth to pursue typical life goals. Meanwhile, large depositors of the ilk of mega-commercial entities, the aristocratic elite, or others with excessive means are discouraged from holding their wealth in monetary form and instead are inspired to invest excess money in non-monetary assets or to cause the money to otherwise continue flowing through the Illuminatian economy. The more money a depositor accumulates, the more quickly the deposits lose value due to the negative interest rate.
Illuminatian economists have found the negative interest rate compounds the value realized by monetary wealth by investing in and improving community and society, and that this value generated in the community has a tendency to far outpace the value the equivalent mass of sedentary monetary assets would otherwise represent.
The Office of the Central Bank enforces the negative interest rate on the Monetary Network deposits of the largest of banks—those which operate at the top-tier of the economic system. The Office of the Monetary Network (OMN) ensures that all Monetary Unit transactions take place using the Monetary Network, so the network provides a central location where wealth is monitored and where the effect of the negative interest rate monetary policy can be scrutined. This collaboration among agencies of the Department of Monetary Policy (DMP) ensures the monetary deposits are equitably subject to the effects of the negative interest rate.
High net-worth individuals
The negative interest rate, in addition to Illuminatia's prohibition on inheritance, discourages intergenerational accumulation of monetary wealth, a societal ill remembered from modern Earthly history and which Illuminatia's founders wished not to be perpetuated within this new world. High net-worth individuals are uncommon, as persons of excessive means find it incredibly costly to maintain a high net worth. Individuals might strategically acquire non-monetary assets that are unlikely to diminish in value over time, but people tend to find this difficult to do without engaging in business and establishing corporations, a behavior which is encouraged in the Illuminatian economy.
Corporations
Corporations are encouraged to let money flow out of their Monetary Network accounts in the form of wages for employees and hiring of services from providers, as the value realized from labor and receipt of services far outstrips the value of accumulated monetary assets which will lose value when left deposited in bank accounts.
This monetary policy also encourages corporate entities to remain small, dissuading the establishment of behemoth corporations and reducing the potential for monopolies and anticompetitive corporate behavior.
Financial institutions and monetary deposits
The negative interest rate encourages the distribution of wealth through lending. Banks pay borrowers to be lent money as the result of an established technique allowing banks to minimize the liability of monetary assets that might collect under their custody. Borrowers are often encouraged to pay back less than what they borrowed. This high accessibility to lending works as an additional incentive for entities to invest capital in enterprise, infrastructure, employment, and other activities that encourage the flow of money through the economy.
Negative interest rate monetary policy more strongly benefits private citizens, who are likely to have smaller sums of liquid monetary assets on hand. It also allows for the domination of small banks in the financial industry. Small banks are also likely to have smaller sums of money in their accounts and are assessed accordingly, as opposed to large banks which are assessed a much more unfavorable negative interest rate.