Rebirth 79: I opened a bank in the United States

Chapter 161 Do you want to give up the bank?
In addition to what has been said before, the bill also stipulates that starting January 1 next year, savings banks participating in the Federal Deposit Insurance Program can provide customers with a new ATS account.

An ATS account is an automatic transfer account. It is a new account rather than an upgrade of the original three accounts.As mentioned earlier, checking accounts, under the 33-year Glass-Steagall Act, do not allow savings banks to pay interest on deposits in such accounts.Only short-term deposits, long-term deposits, and time deposit accounts are allowed to pay interest.

The ATS account is very interesting, it breaks through the barriers between checking accounts and short-term deposit accounts.That is, a sum of money can automatically jump repeatedly in these two accounts.

When customers need money, they will automatically transfer the corresponding money from the checking account to the checking account to complete the payment; the excess funds in the checking account will also be automatically transferred to the checking account to start accumulating and generate interest.

To put it bluntly, this thing is actually similar to the domestic demand deposits in the future.Use it if you want, and earn interest if you don’t use it!
From the permission to open ATS accounts to the removal of the upper limit of deposit interest, Carter has smelled a hint of the federal government's intention to allow savings banks to increase their storage capacity.

In terms of deregulation of business operations, such as canceling or raising the state government’s upper limit on a series of loan interest rates such as single housing loans and housing renovation loans, and even allowing savings banks to engage in commercial investment businesses that do not exceed 20% of their own assets, etc. .
This series of measures to increase the business scope of savings banks seems to be trying to find a way for savings banks to quickly spend the funds they have just absorbed.

If it is said that the increase in storage capacity is to cooperate with the Fed's monetary contraction.Then the business growth.
One side releases water, one side enters water?Is this a primary school math problem? !
"Masters in Washington want to send us to die again, and are afraid that we will die too quickly. If you are... hey."

Goodman, who also followed Carter to see the end of the bill, only felt a thunder in his mind.With trembling hands, he touched the cigarette on Carter's table, lit it tremblingly, and sighed:

"Greatly increased our storage capacity, and blocked our operating capacity. This Washington is really inflated! Help them shrink the currency, and let us destroy ourselves when it's over"

"You are saying that the purpose of canceling the upper limit of deposit interest is to allow our peers to compete for the market, compete to increase deposit interest, attract people to deposit excess money in banks, and reduce circulation in the market. And then limit the amount we can use The channel for making money out of this money forced most of the cash to remain in our hands.”

Goodman's words were like a bright light in the dark, and Carter quickly understood the logic.

Yup!

With the gradual lifting of the upper limit on deposit interest, in theory, as long as a bank has sufficient funds and is not afraid of losing money, its storage and storage capacity will increase almost without limit!To use an extreme example, I offer 100% annual interest on deposits, and almost no one is willing to deposit money in their own bank when issues such as trust in payment are ignored.

But I have absorbed a large amount of deposits, where should I spend them?As far as the business scope of traditional savings banks is concerned, the deposits they can absorb and the loans they can issue are basically in balance.There are only so many people in a place, and there are only so many houses for housing loans.

If a large amount of savings is collected at this time, it is certain that such a large amount of residential loans will not be released.Therefore, the business licenses for other businesses have been opened to increase the profitability of some savings banks to ensure their survival, but they have not been released.In other words, most of the cash deposits will still be in the hands of banks.

"That's right, especially when the surrounding peers raise deposit rates to attract depositors' deposits. It is no longer simply a matter of a certain bank saying that it will not raise deposit rates if it does not raise deposit rates."

"As long as the distance is not too far away and the interest rate is much higher than yours, which bank the depositors will choose to deposit is completely a question that can be thought of with their toes. Even if it is to prevent the outflow of funds in their own bank, even if they absorb The funds that come in can’t be spent at all, and many banks have to bite the bullet and raise deposit interest rates, and then hold a lot of money in their hands. Just wait for one day in the future, if they can’t bear it anymore, this thunder will explode!”

ruthless!How cruel!

The mellow and delicious cigarettes in the past, now inhaled in the mouth, Goodman only felt unusually bitter.It seems that since last year, Carter has been saying that he firmly believes that the high inflation that has lasted for a decade will inevitably be contained for a period of time.

Goodman was still skeptical at the time, but now, he completely believes it!

This trick is a naked conspiracy!This Pandora's box will be opened when the first ambitious bank with strong assets starts to raise deposit rates.

The rest of the banks have to grit their teeth and keep up with the former just to survive.The interest rate on deposits has been raised, and a large amount of deposits have been absorbed, but they cannot be spent. One day in the future, they will not be able to pay the high interest, resulting in lower and lower bank capital until bankruptcy.

If you don't raise the deposit interest rate, your deposits will be greatly reduced immediately, which will directly lead to your financial bankruptcy!
One is to die earlier and the other is to die later.In the real world, although there are always people shouting "early death and early life", in fact, "a good death is worse than a good life" is the choice of most people.Maybe if it drags on, there will be a chance for a turnaround?

Goodman believes that if he sees the problem, there must be others in the banking industry.But seeing is not the same as doing
Just like the Pandora's box in the story, even if you know it can't be opened, there will always be someone to open it!The so-called demons actually mostly come from human nature.

It is obviously extremely absurd to pin the hope of breaking the situation on praying to others, or on the tacit agreement of the banks to keep the deposit rate unchanged.But apart from pinning his hopes here, the only way Goodman can think of to break the situation is to
Big capital crushing!
Resist this crisis with sufficient reserves!
The result of raising deposit interest rates and accumulating a large amount of reserves is nothing more than a loss of money for everyone.Then it depends on who has more background and can carry it better!
After killing a group of banks and killing a group of banks, people who feel pain can regain their composure.Only then can we really sit down and negotiate a relatively uniform deposit interest rate that everyone can accept, so as to reduce unfair competition and internal friction.

Speaking of capital, Goodman naturally looked at Carter:

"Carter, your HT company"

"The progress of this matter has already begun to advance, how can it be stopped at this time! If it is suspended at this time, the sunk cost is too high, I am not reconciled!"

Rubbing his swollen temples, Carter, who was also aware of the crisis, immediately thought of HT Company.This gold swallowing beast that is consuming a lot of its cash reserves
In addition to sorrow, Carter had to feel grateful.Fortunately, I didn't choose the nationwide plan. If I followed that plan, my cash reduction rate would increase by at least 50%!

"Hey, I understand you. A company that invested tens of millions in the early stage should stop at this time. How about we give up the bank? In the future, we will work in the catering company full-time. I will learn from Mr. Genus, or I will go undercover at McDonald's, Go to the University of Hamburg and come back"

(End of this chapter)