Rebirth 79: I opened a bank in the United States

Chapter 119 Different Regulatory Bodies

Federal Deposit Insurance Program, implemented in 1934.The body that provides this insurance, the Federal Deposit Insurance Corporation, is not a private institution, but an independent financial institution established by the U.S. federal government.

So in theory, joining the Federal Deposit Insurance Program also means that the bank is regulated by the US government.But compared to joining the Federal Reserve System, this supervision is much smaller
The reason is that Carter feels that the core difference should lie in the difference between the two regulatory entities.

First of all, let's talk about the Federal Reserve System. The supervision of the Federal Reserve System comes from the Federal Reserve Board.This is a serious government department and an administrative unit. Simply put, it has no revenue task.Its core task is to ensure stability and ensure the adequacy and stability of the US national currency reserves.

The FDIC's regulation is different from that of the Federal Reserve.Although the Federal Deposit Insurance Corporation was also established by the US federal government, listen to the name, the company!company!company!

They are all called companies, so it is obvious that they are no different from a normal commercial insurance company outside of their regulatory functions.They also want to make money!

Similar to general insurance companies, after the FDIC collects insurance premiums from various savings banks, it will put the money into the bank insurance fund and participate in market activities.

The nature of the two is different, which directly determines the focus of supervision and the intensity of supervision.

To put it simply, it is the supervision of the Federal Reserve System, which cares more about the safety of funds!They are more concerned about the safety and stability of the overall currency reserves of the Federal Reserve System composed of various savings banks, large and small.Therefore, any funds that do not flow within the rules will attract their high attention and attention. I am afraid that everyone will do this, and eventually the entire fund reserve plan will be riddled with holes.
In other words, what the Fed system plans is stability!As long as you stabilize, it doesn't matter if your scale is small, as long as you don't move around, we are good friends!

But the FDIC was different. Instead, he wished that every bank that joined his plan would be profitable and make money.Because these banks have grown stronger and larger in scale, they can absorb more deposits from depositors, which means that the annual insurance premiums they have to pay to them are also high!

So, it doesn't care if you follow the rules or not.It doesn't matter whether it's messy or messy, it doesn't matter to the FDIC!Its worry is more about: Will you bankrupt the bank if you do this shit, and then ask me to pay for the insurance.
As long as you don't go bankrupt and don't let the FDIC pay out to compensate the depositors, but instead send him insurance premiums every year, or even send more and more, then you and the FDIC are good friends!Even if you engage in some illegal operations, they will come forward to help you cover up
Based on concerns about the risk of bank bankruptcy, the FDIC's regulatory focus and regulatory direction have become clear.There is only one core indicator: asset risk ratio, risk-based capital ratio!

In this age when electronic statements have not yet appeared, and information and data interaction are relatively primitive and backward. The FDIC's review is usually on an annual basis. When the time comes, they will send auditors to make statistics on the assets and risk assets of the banks in the plan.

根据统计结果，他们会将各银行划分为五个等级：10%以上为资产情况良好；8%～10%为资本充足；6%～8%为资本不足；2%～6%为资本严重不足；2%及以下，为资本极端不足！
According to the content of the agreement to join the insurance plan, when the proportion of risky assets of a certain savings bank in the plan falls below 2%, the Federal Deposit Insurance Corporation has the right to directly take over the bank and carry out bankruptcy reorganization.

Usually, the way they deal with it is very simple and rude.Where local laws and regulations allow, directly package and sell the deposits and debts of the extremely undercapitalized bank to a nearby bank with good assets or sufficient capital.

This is a very common, even the most common, way of bank mergers.And it has strong coercive force. For the original bank owner, the agreement stipulates clearly that if you do not manage well and let the venture capital ratio fall below 2%, you will automatically lose your ownership of the bank.

This means that the merging party does not need to consider the opinions of the original boss at all, and the Federal Deposit Insurance Corporation does not directly operate the bank, they will only choose to sell.They were even worried that they might not be able to find a "taker" for a while.
This situation can be described as hit it off, and the annexation of another bank can be completed without resistance.But this method is not very common in this day and age
The reason is still the same reason, the relatively backward efficiency of information transmission.It will make the FDIC's supervision full of loopholes, such as the yin-yang contract that will often explode in the Chinese film and television industry in the future, and it is also very common in the American banking circle in this year.

Before the scrutiny comes, it is often the peak period for banks to borrow from each other.These loans will be entered into the bank's public account in the form of capital injection, and will be included in the bank's total assets as bank capital, in order to increase the proportion of risk assets in the FDIC review.After muddling through, return the money with interest.

Even for ordinary small savings banks, the most borrowing needs are often to cope with inspections.This routine has been played too much, and the FDIC is not a fool.

After finishing the statistics every year, go back and take a closer look.On one side is what looks like a thriving scene.Every bank is so rich~ The people are so rich~
On the other hand, there are always some banks that showed good asset status before, but suddenly collapsed.There is nothing tricky in this sharply contrasting scene, and even a dog would not believe it.

As a result, the FDIC's review has also become more stringent. Last year's Black Bank contracted loans in the second half of the year and recovered more loans in the form of land and other fixed assets, reducing risk assets. This is considered a lucky pass.

Carter believes that in the near future, after the FDIC review data statistics are completed, it is estimated that some working groups will be dispatched to start bankruptcy processing of some banks.

What Carter was waiting for was such an opportunity.If there is a bank collapse near Douglas, then I, who is closer, is the best candidate to take over!

But now we are talking about hidden dangers, so let's not mention opportunities for now.

Merging its own Black Bank through the FDIC is basically impossible unless the own bank is extremely undercapitalized.

Especially now that I have entrusted Julian to close the gold position, and a large amount of money will be credited to the account soon.It is not too simple to increase the capital ratio.

Directly inject [-] million funds into it, and the ratio will immediately skyrocket.
Then look at the third category, that is, banks that have neither joined the Federal Reserve System nor the Federal Deposit Insurance Program!

This type of bank will be rare in the future.But in this year, the number is still quite a lot. This kind of barbaric growth bank is actually the bank with the most variables!It's also the easiest bank to hit someone by surprise.
(End of this chapter)