Reborn Tokyo Golden Age.

Chapter 539
The Congress in early 92 will not only discuss relief measures for the financial industry, but also announce the economic situation of the previous year.

Leaving aside other data, the GDP in 91 alone made many officials shudder.

In 89, Neon's GDP could still reach about 5%, but in 90 it became 2.2%.

However, in the most recent year, last year, this number has become -0.34%!

If we only look at the numbers, Neon’s economy is going backwards.

Since it began to take off in the 60s, Neon has maintained rapid economic growth most of the time.

When the growth rate was at its fastest, GDP even exceeded 12%. However, after a round of blows from the bubble, the economy has completed negative growth? !
From heaven to hell, it was such a rapid reversal that many government officials could not even react.

But the headaches don’t end there. The bubble has just burst, and many negative impacts have yet to appear.

The current situation in the financial industry is also extremely worrying. Under various blows, many officials in Congress have extremely solemn expressions.

After several days of discussion, the Ministry of Finance took the lead in preparing a thorough inventory of Neon's financial industry.

If you want to save banks and maintain the "myth of banks not failing," you must understand the real situation the financial industry is facing at this moment.

Therefore, all banks that have reported huge losses and have asked the Ministry of Finance for help must accept the working group assigned by the Ministry of Finance.

These working groups do nothing and are only responsible for finding out the assets of each bank.

Faced with the suddenly tough attitude of the Ministry of Finance, major banks can only accept it silently.

Because Neon's financial industry has indeed been troubled in the past two years, with various blows coming one after another.

If nothing is done, something unexpected may happen.

So starting from the beginning of 92, all civil servants from the Ministry of Finance began to mobilize and fly to neon cities large and small.

Changyin, who originally resisted, had no choice but to accept the investigation honestly.

After nearly three months of investigation, the data brought back by civil servants made the Ministry of Finance almost jump in shock.

Last year, the bad debts announced by 21 banks were about US$1100 billion, which was equivalent to about 15 trillion yen.

However, this year this number has tripled or quadrupled, reaching a terrifying over 50 trillion.

Coincidentally, this number coincides with the estimated number that Miyazawa Kiichi distributed to many bank heads in the villa more than a year ago.

However, Miyazawa was still conservative at the time. The expert group he convened estimated the figure based on the late 90s as the dividing line.

But where are we now? 92 is just the early 90s.

The reason for such a large discrepancy is that land prices continue to fall rapidly.

Over time, banks' non-performing assets have also expanded rapidly.

Another reason is that all major banks cover up their bad debts.

Making false accounts is a traditional art in the banking industry, right?

Especially Changyin, after the Ministry of Finance conducted a thorough inventory of it.

Faced with the various accounts, the civil servants who came fell into silence.

After looking at Chang Yin's assets, Minister Haneda also fell silent.

What about 4 trillion yuan in losses and bad debts? That’s just a lie.

Previously, Changyin announced a total loan amount of about 12 trillion, of which bad debts were about 4 trillion.

It was because of being exposed by the media that I had to publish the data honestly.

However, both the media and Bai Chuanfeng, who had been following Chang Yin for two years, underestimated Chang Yin.

According to this survey, Changyin’s overall loan assets are 26.6 trillion yen.

Under normal circumstances, banks should be happy to have such loan business.

After all, bank lending is one of its main means of profit, whether you are a special bank or an ordinary bank.

But what is hard to find is that 26.6% of Changyin’s 55 trillion loans are related to the real estate industry.

Needless to say, what is the current situation of the real estate industry?
Optimistic estimates suggest that nearly 26.6% of the 40 trillion yen in loans may become bad debts.

With more than 2.8 trillion in non-performing assets, it’s no wonder that the [-] trillion yuan in relief funds previously allocated by the Ministry of Finance to Changyin seemed to have been wasted.

This little money is simply a drop in the bucket for Changyin.

Changyin is a big, bottomless pit. The moment he saw the report, the Tibetan Prime Minister Haneda sentenced Changyin to death.

Ten trillion yen, the Ministry of Finance can come up with it with gritted teeth.

But what about other banks? More than 50 trillion in debt is enough to ruin the entire Neon financial industry.

At this time, even if he did not deal with Miyazawa's cabinet, Haneda had to pick up the phone and start asking for help from the Prime Minister.

Miyazawa also felt numb after hearing the numbers reported by Haneda.

How the hell can I save this?The economy is in recession, and the country has no food surplus.

Besides, the annual national budget is limited. Education, medical care, agriculture, industry and commerce, transportation, scientific research, none of these require money.

You can't give up other industries just to save finance, not to mention whether Miyazawa dares to make this decision.

Congress will never agree to this. If finance has its own scandals and bad debts, why should other departments share the responsibility?

Faced with this extremely troublesome figure, Miyazawa thought over and over again and decided to let the Ministry of Finance save itself first.

No matter what, we must stabilize the situation first, and there must be no signs of further collapse.

The advantage of the Ministry of Finance's self-rescue is that the money does not need to be discussed by Congress and can quickly have the effect of intervening in the market.

So Haneda, knowing that the matter could not be delayed, immediately allocated 2 trillion yen in relief funds to help the major banks to survive first.Here, Miyazawa took the lead in discussing the rectification of the banking industry with Congress. The facts are before us, and it will be too late if changes are not made.

However, there has been collusion between government and businessmen since ancient times, especially Neon, which is known for its nepotism.

The data that Haneda had read was placed on Shirakawa Kaede's desk the next day.

In fact, not only him, but also several other chaebol leaders also had corresponding information.

After seeing how big the threat in the banking industry was, Bai Chuanfeng also took a breath.

My previous calculations with Yu Arai were still conservative. Chang Yin also deceived too many people.

Among the top ten borrowers of Changyin, there are five real estate companies, three financial companies, and two industrial companies.

In other words, finance and real estate account for 10 of the 8 places. The only two industrial companies are Tokyo Electric Power and Kawasaki Heavy Industries.

And their ranking is still relatively low, financial real estate is Changyin's hot cakes.

Looking at the list, Shirakawa Kaede and Arai Yu both smiled bitterly.

“I didn’t expect that Changyin, which started out as a heavy asset company, would end up losing its basic base.”

“Faced with huge profits in the stock market and real estate in the golden age, few banks could remain calm and unfazed.”

Arai Yu is not surprised by the situation of Changyin. The financial industry inherently likes to pursue high-risk and high-profit financial products.

I just didn’t expect that Changyin’s loan scale far exceeded original expectations.

"Arai-san, with Changyin's current scale of bad debts, can Hokuto Bank absorb it?"

Faced with over [-] trillion bad debts, Bai Chuanfeng also became less confident.

This was far from what he originally expected. He wanted to grow silver, but not at the expense of himself.

“If all the RMB [-] trillion is bad debts and non-performing assets, Beidu Bank will not be able to bear it.

Chairman Shirakawa, don’t forget where Changyin’s financing comes from. It is essentially different from Hebeidu Bank. "

Hearing Arai Yu's reminder, Shirakawa Kaede smiled bitterly again. He almost forgot that Changyin's predecessor was a special bank.

Unlike commercial banks such as Beidu Bank, 80% of Changyin's financing is obtained through the issuance of bonds.

The ratio of coupon bonds and discount bonds is about 3:1. The difference between the two is that one has a five-year repayment period and the other has a one-year cash return period.

The former are mostly held by institutions, while the latter are mostly purchased by individuals.

A simple and crude understanding is that the money Changyin lends to major enterprises comes from crowdfunding.

Changyin earns profits from the interest rate difference between the interest on loans and the interest on bonds issued.

Originally, if the loan target was an industrial group, this should be a very stable loan income.

But the difficulty is that Changyin has gradually transformed and invested all its money in financial real estate.

Now these bad debts and non-performing assets are all money obtained from issuing bonds.

In other words, the money needs to be returned to institutions and individuals with interest.

In essence, Changyin itself is also a debtor, and it owes money to those who bought Changyin bonds.

Now that there is such a big shortfall, what money will Changyin use to pay its creditors after it matures in one or five years?

If you can't come up with the money, bankruptcy is what's waiting for you.

To be honest, Beidu Bank cannot cover a deficit as big as [-] trillion.

The cold wave of the bubble has not yet demonstrated its power. Who knows whether Changyin's bad debts will increase.

Just when Bai Chuanfeng was in a dilemma, suddenly the phone on his desk rang.

"Moxi Moxi? It turns out to be Miyazawa-san. I will definitely be there."

Bang, hung up the phone, Bai Chuanfeng looked complicated.

“The Miyazawa Cabinet hopes to invite Hokuto Bank to discuss the Neon Banking Industry Improvement Plan.

Changyin is one of the key topics of discussion, and it seems that the Ministry of Finance is ready to abandon it. "

"Eh?" Arai Yu was caught off guard by such news.

He did not expect that the Ministry of Finance would move so quickly. Wasn't the "myth that banks cannot fail" always a creed that it tried its best to maintain?
In fact, the Ministry of Finance has no other choice, because some media have revealed that the banking industry has bad debts of more than 50 trillion.

The stocks of major banks on the market are now plummeting.

The stock price of Changyin, which was originally hanging on at 200 yen, has reached around 120 yen.

If it falls below 100 yen and breaks, then Long Silver will really be doomed.

According to the procedures of Topix, stocks that have been listed for a certain period of time will be delisted.

A delisted super first-class bank is a joke. Neither the Ministry of Finance nor the cabinet can afford to throw that person away.

"President Shirakawa, what should we do now?"

Ten trillion yen, long silver... these made Arai Yuichi undecided for a while.

The more unexpected the situation, the calmer Bai Chuanfeng becomes.

He paced back and forth in front of the window for a while, then turned back and pointed the right direction.

"Find foreign aid and formulate a detailed plan to acquire Changyin!"

(End of this chapter)