Representatives of major banks in Beijing gathered in the Imperial Bank conference room.
Every half month at the Imperial Bank, they will convene representatives from major banks for a short meeting.
This meeting is usually for the Imperial Bank to convey His Majesty's instructions and new regulations on the banking industry.
Representatives from major banks will also exchange information on the banking industry.
They can also communicate directly with the supervisory office, Imperial Royal Bank, through this meeting.
Today's banking industry meeting has turned into a grievance meeting.
The representative of Jinshang Bank first complained: "We have worked hard to support the growth of those small businessmen.
Once they succeed, they will not say anything in return to Jinshang Bank.
They also transferred the funds in the bank to the Imperial Bank account.
Imperial Bank is strict about money review, and some scenarios where the reconciliation period is not high are fine.
In a shopping mall with a high-frequency trading environment, Imperial Bank’s response speed is indeed not as fast as ours at Jinshang Bank.”
Representatives of Jinshang Bank directly exposed the shortcomings of Imperial Bank on this occasion.
He knew it wasn't a good idea to do this, but he had no choice but to do so.
The representatives of Jinshang Bank saw what he said and were recognized by most of the bank representatives.
He had anticipated this situation, and the economic crisis had not yet completely arrived.
But businessmen with a keen sense of smell have already foreseen the coming crisis.
They transferred their money stored in other banks to the Imperial Bank, which they thought was safe.
Depending on the reputation of the bank, the amount of losses varies greatly.
The representative of Jinshang Bank is so anxious because Jinshang Bank has lost a large amount of deposits.
Only when banks absorb deposits from depositors can they convert the deposits into loans and lend money to companies.
The interest rate difference between deposits and loans is the profit earned by the bank.
A representative of Tianjin Bank mocked: "A completely private bank like you is too bold to do things.
The problems encountered by Jinshang Bank are no secret in the banking industry.
Your loan review standards are too low, and a large amount of money has been loaned out and cannot be recovered.
Depositors thought that your Jinshang Bank was at risk of bankruptcy, and they immediately chose to withdraw their deposits.
A public-private bank like ours will not do things so radically.
A large part of the assets are purchased from treasury bonds and government bonds, which have strong repayment capabilities.
But if there is a run crisis, our Tianjin Bank will not be able to withstand it.
No one in our bank can blame anyone else. If any bank encounters a run crisis, it will not be able to survive it.
This meeting must be led by the Imperial Bank to study how to deal with the run crisis."
Zhang Kuoling, President of Imperial Bank, was walking into the conference room at this time.
Hearing this question, he quickly waved his hands and said: "If our Imperial Bank encounters a run crisis, it will be a huge headache.
We have conducted simulation experiments and found that the run crisis is nationwide, so other than lying down and waiting to die, the only way is to ask the court to take action.
If it is a local run crisis, it is still possible to get over it.
Immediately transfer silver coins from banks in other areas to show the people that their bank has sufficient principal.
People tend to do things blindly. They see that banks have enough money, so they will not continue to run on them.
The interest on bank fixed deposits is a considerable amount of wealth for many people."
President Zhang Kuoling looked unhappy when he saw many bank representatives.
Except for a few banks such as Imperial Bank.
Most commercial banks cannot meet the requirements.
Commercial banks pursue profits and have a few silver coins in their hands. They want to let them borrow more loans.
They never leave too much reserve.
This is the short-sightedness caused by businessmen's pursuit of high profits.
It is precisely this kind of behavior that only pursues short-term interests that has caused many commercial banks to fail to survive this economic crisis.
The imperial court was prepared for the bankruptcy of a large number of commercial banks.
All the preparations made by President Zhang Kuoling were to isolate risks between commercial banks and Imperial Bank.
Whatever changes occur in commercial banks will not affect Imperial Bank.
Now this matter has been done very effectively.
President Zhang Kuoling acted more calmly about the current situation.
He quickly walked to the head seat of the conference table.
President Zhang Kuoling knocked on the table and said in a cold voice: "The method I just mentioned is already what the imperial court can do.
Similar to deposit reserves, each bank prepares emergency reserves.
Our Imperial Bank only supervises this matter, and we will set up a banking association to be responsible for the specific matters.
Once there is a run crisis on a bank, the emergency reserve will be based on the bank's assets and lend silver coins equivalent to the value.
Once the bank gets through the crisis, it can repay the money in batches.
If the bank cannot survive this crisis, the Banking Association can take over the assets of the bankrupt bank and conduct an internal auction."
Representatives of the major banks sighed helplessly when they heard the Imperial Bank's approach, but they all chose to join the newly established association, the Banking Association.
Small banks are willing to join, but their risk resistance is very low.
Now that there are banking associations, their ability to resist risks is almost the same as that of large banks.
Large banks are also willing to join. After the Banking Association is established, many high-quality resources of bankrupt banks will be controlled by the Banking Association.
Banks that do not join the banking association do not even have access to these high-quality resources.
President Zhang Kuoling facilitated the establishment of the Banking Association, and his work today has been completed.
Representatives of major banks saw that Imperial Bank no longer controlled the meeting.
They spoke one after another and made their requests.
The question with the most feedback is the problem of transferring deposits from major banks to Imperial Bank?
Zhang Kuoling has absolutely no room for negotiation on this issue.
He said in a sharp tone: "People have the freedom to deposit money in whichever bank they want.
Major banks are not allowed to prevent people from withdrawing money.
You have to win the trust of the people through service, not deception."
This chapter is not finished yet, please click on the next page to continue reading the exciting content! Representatives of major banks saw Imperial Bank’s firm attitude and knew that this matter was non-negotiable.
Representatives of major banks have reached a consensus on this issue.
Because their situations are different, they have different demands.
Each type of bank makes claims in their favor.
There is absolutely no consensus among the major banks.
At the end of this meeting, no consensus was reached except for the establishment of a banking association.
Representatives of Jinshang Bank at the end of the meeting.
He asked Zhang Kuoling with some anxiety: "Sir Zhang, the court has made up its mind to bankrupt the bank. Is there any room for maneuver in this matter?"
Zhang Kuoling slapped the table and said: "There is no room for maneuver, the bank is insolvent, and there is absolutely no value in saving it.
We cannot allow Imperial Bank to provide help to these banks with negative equity.
Doing so will have no effect other than bankrupting the Imperial Bank."
Representatives from major banks heard President Zhang Kuoling’s firm words.
They all know that the bank's toughest time is coming.
Especially debt-ridden banks, they can't think of how to save themselves, and their hearts are filled with despair.
…
At the headquarters of Jinshang Bank, President Qiao Wenkai heard the reports from his subordinates.
He immediately lit a cigarette and took the exam while smoking.
Most of the shareholders of Jinshang Bank are Shanxi merchants.
They are not only shareholders, but also the best lending partners of Jinshang Bank.
The interest rate for your own bank loan will be lower, and you can handle various chores well.
Shanxi merchants have many roots, but their headquarters is in Shanxi.
Shanxi is mountainous, except for coal mines and mining enterprises, which are very profitable.
For other companies, limited by raw material costs and transportation, the cost of industrial products is higher.
In order to compete with businesses in other places, Shanxi merchants will inevitably find ways to reduce the cost of their products.
As the cost of the product decreases, the quality will also decrease.
When the market is growing, no one will care about this small gap.
Now that the economic crisis is coming, everyone is tightening their belts.
If the quality of products at the same price is not as good as that of competitors, it means that the product cannot survive in the market.
Shanxi Merchants' companies collapsed on a large scale, which directly led to the inability of Shanxi Merchants Bank to collect the loans.
Now the deposits of major customers of Jinshang Bank are being transferred out again.
The funds available to Jinshang Bank are already in jeopardy.
Once large-scale fluctuations occur, Jinshang Bank is likely to collapse.
President Lu Qiaowenkai was filled with self-blame.
Jinshang Bank's current end is not unrelated to his slightly radical business philosophy.
The hole in Jinshang Bank is too big now, and Qiao Wenkai's friends are also in a precarious situation now, and they can't come up with money to help him tide over the difficulties.
Qiao Wenkai predicted that a small fluctuation in the market could overwhelm Jinshang Bank.
He now lives in fear every day.
Some Shanxi merchants with good connections withdrew money from Shanxi merchants' bank accounts.
Qiao Wenkai secretly hated it, but he didn't dare to stop it.
Once someone tries to stop him, the person involved will publicize the matter.
The truth that Jinshang Bank has no money will be exposed.
This will lead to a run crisis on Jinshang Bank, and it will be difficult to save it at that time.
The funds provided by the Banking Association are simply unable to cope with a run crisis on a bank of the size of Jinshang Bank.
When Qiao Wenkai was thinking wildly, the phone on his desk rang rapidly.
He picked up the phone, called and waited for the other party to speak.
"President Qiao, it's not good.
Luxi Bank did not allow depositors to withdraw money, which directly caused panic among depositors.
Luxi Bank, a local bank, soon went bankrupt due to a run on its depositors.
It was the first bank in the Empire to fail, and now the media is reporting it."
When Qiao Wenkai heard the news, he closed his eyes.
Jinshang Bank is hopeless.
Bankruptcy will inevitably lead to panic among the people.
They rush into the bank where they deposit their money and want to withdraw the money they have deposited.
Such a simple request can turn into a crowding crisis if too many people request it.
There will inevitably be banks that cannot withstand the run crisis and go bankrupt.
When people see that the bank is really bankrupt, they immediately believe that the money they have in the bank cannot be withdrawn.
This will allow more people to join the army of withdrawing money, and the bank run crisis will become more serious.
When such a situation occurs, it has formed a vicious cycle, and even banks with healthy financial conditions may not be able to survive.
Jinshang Bank no longer has too many silver coins and will definitely not be able to afford this money.
…
Taiyuan Prefecture, Shanxi Province.
"Li Tieniu, the bank next door where Zhu Laosan saved his money collapsed, and Zhu Laosan's wife fainted from tears.
Newspapers are saying that the current economic situation is not good and the banking industry is the most prone to problems."
Li Tieniu heard his mother's urging and explained: "The court has made regulations that even if the bank goes bankrupt.
If the assets in the account are less than five hundred taels of silver coins, the court will pay the compensation on your behalf."
"Li Tieniu, why are you so stubborn about this matter?
Your mother has eaten more salt than you have eaten rice.
I don't understand the banking industry, it's all these monsters.
But I know how efficient the government is at doing things.
If this matter really follows the procedures and can be completed within one year, it will be considered fast.
The government's delays may prevent us from getting our money back for a long time.
Once there is a rush for money in the near future, we will be in big trouble.
Losing a little interest now is better than losing principal later.”
Li Tieniu saw that his mother was very determined.
He could only take his bankbook and go to Jinshang Bank to withdraw money.
He was still muttering in his mind, as the largest bank in Shanxi, Jinshang Bank can't have anything happen to him, right?
The government will not let anything happen to Jinshang Bank.
He came to the gate of Jinshang Bank and saw a large number of people queuing at the door of Jinshang Bank.
These people all waved their passbooks in their hands, preparing to enter Jinshang Bank to withdraw money.
However, Jinshang Bank used loudspeakers to repeatedly broadcast the message to people whose deposits were less than five hundred taels of silver coins. Regardless of whether Jinshang Bank went bankrupt or not, their deposits would never disappear.
This method is effective for rational people.
The people outside Jinshang Bank looked slightly panicked, and they all wanted to rush into Jinshang Bank to withdraw money.
Li Tieniu is also one of them. He believes that the court will not let his money evaporate.
The emperor has issued a decree, indicating that this matter has attracted the attention of His Majesty the Emperor.
Those officials would never dare to line their own pockets in this matter.
But what happened in the past few days really made many people unwilling to wait any longer.
In just one week, Luxi Bank, Chizhou Bank, and Baixin Bank went bankrupt one after another.
When these banks go bankrupt, the worst sufferers are the big depositors.
But these wealthy people are rich and have no shortage of money.
The common people whose total deposits do not exceed five hundred taels of silver coins are the main force of the crowd.
Li Tieniu listened to the people around him talking about things.
He also realized that good policies may not achieve good results.
These people all have something going on at home and need money urgently.
They couldn't bear it at all. The silver coins were frozen in a short period of time, and they could only find a way to take them out in advance.
Li Tieniu followed the crowd forward and observed the performance of these people. They all had sorrow on their faces, fearing that they would not be able to withdraw the money.
The team had reached the middle, and Li Tieniu suddenly heard a loud shout from the front: "Why don't you let me withdraw money?
Everyone, act quickly, Jinshang Bank is out of money."
This sentence immediately caused an uproar in the team.
They all came to Jinshang Bank to withdraw money, but now they heard that Jinshang Bank has no money.
Even the calm Li Tieniu is no longer calm and is ready to use his own methods to get the money that belongs to him.