Age of Dreams

The previous life Lehman Brothers will not submit an application for bankruptcy protection until September 14, but this life is two days earlier. &Top&dot&novel{}.{}{wx}.{}

It should have been announced on the 15th that Bank of America urgently acquired Merrill Lynch, but it did not follow in advance.

Of course, the situation of Merrill Lynch is not at all easy compared to Lehman Brothers. If there is no help, their bankruptcy will be a matter of minutes.

But what Merrill Lynch is better than Lehman Brothers is that they have one of the best securities trading companies in the world. This capital is a very good benign asset. Whoever gets it will definitely benefit long-term development.

And this is the most important reason why Bank of America chose to rescue Merrill Lynch instead of Lehman Brothers.

However, Xiao Qi received a call from Jabil, executive vice president of Citibank, on the 13th.

Then it didn't take long for Xiao Qi to meet the most powerful figure in Citibank in the reception room of Fairy Company.

"Mr. Jabil, you can just call if you have something to do. Why do you want you to come here in person?" Xiao Qi shook hands with him, "But when did you come to Rongcheng? Why didn't I hear President Qu talk about it?"

"I just got off the plane." Jabil looked windy and frosty, "Little Qi, I'm here to find you for help."

"Huh? What do you mean?" Xiao Qi asked in surprise.

"To tell you, Citibank's situation is very bad now. We are only one step away from bankruptcy. We have thought about everything, but there is no way to save Citibank." Jabil said in a deep voice.

Citibank is going to collapse?

its not right!

In the previous life, although Citibank suffered serious losses, they had the support of physical banks and their main deposit and loan business was very stable, so they finally turned the crisis into peace.

This is even more so in this life. They also received Tang Mingxiang's 4 billion US dollars for the purchase of shares. It stands to reason that it is not so fragile.

Thinking in his heart, Xiao Qi smiled and said, "Mr. Jabil is serious. Citibank has operations all over the world. How could it be this way because of subordinated debt? You will definitely be able to turn the crisis into peace."

Jabil shook his head and said sternly: "Qi Shao, you don’t know that Citibank is not only losing heavily on subordinated debt. Although we are also engaged in bond sales and trading. But our main business is the banking industry. It’s not a specialized investment bank like them. This loss is really small, accounting for more than 30 billion U.S. dollars, but many of the companies in which we hold shares have fallen into subordinated debt. In addition to this, At least US$100 billion or more! To rescue them, it would cost at least US$800 billion. Where do we have this money?

It won't work without saving them. Because once this matter is disclosed, everyone will lose confidence in Citibank. If deposit users panic and cause a panic run, Citibank will definitely not be able to hold it! "

Xiao Qi nodded when he heard the words, he understood what Jabil meant.

It turned out to be so.

To talk about what commercial investment banks are most afraid of, it is a run!

Generally, the ratio of deposit and loan interest rates of commercial banks is very small. However, loan business is still a big income for commercial banks, except for interest. There are also many things that can be done by borrowing loans, such as borrowing as a condition, negotiating shares or the distribution of other benefits, and so on.

The same goes for investment. Each bank has its own investment department.

Where does the money from the investment department come from?

It must come from deposits. They are not the Central Bank, and they cannot print banknotes by themselves.

So they usually lend out people's deposits. Or it can be used to make various investments, leaving only a small amount of money in the bank.

In order to prevent commercial banks from over-operating people's deposits, maintain the liquidity of assets, strengthen the solvency of banks, and prevent chain commercial banks from failing. In the 1920s and 1930s, Western countries established a "deposit reserve system."

Usually it is to let commercial banks pay 8% of the total bank deposits to the Central Bank, and let the Central Bank take care of them, which is also a kind of protection for depositors.

When the financial situation is dire, the Central Bank can also adjust the financial market by raising and lowering the deposit reserve ratio to avoid huge shocks.

But in the 1980s and 1990s, Wall Street invented various financial derivatives, and these financial derivatives made it easier for commercial banks to mobilize funds, and it was easy to break away from the supervision of the central bank.

Therefore, the central bank’s “statutory deposit reserve system” played a smaller role in regulating finance. Finally, many Western developed countries such as the United Kingdom, Canada, and Sweden directly reduced their deposit reserve to zero.

However, the United States is still wary of Wall Street. Although it has relaxed, it does not mean to completely reduce it to zero. Otherwise, the collapse of Lehman Brothers will cause countless investors to lose even more.

This "deposit reserve system" is actually not that secure, because you only pay about 8% of your deposits. What about the remaining 92% of your deposits?

Because of this, if 30% of savings accounts in a bank go to withdraw money together, then the bank will go bankrupt.

Even if more than 20% of savings accounts make withdrawals, the bank will definitely fall into a huge crisis, or it may go bankrupt.

This is commonly known as a run.

The root of the run is not how much money a bank has left, but because the people have completely lost confidence in the bank. They are worried that their deposits will be wiped out, and they want to get their deposits back urgently.

If you have confidence in this bank, even if he has less than 1% of his funds in hand, there will be no run on the bank.

For example, the six major commercial banks in China, even if they only have 1% of funds, the people will not worry, because they know that even if these banks have problems, the country will not ignore them.

Because they believe in the country and the country’s credit, the Chinese believe in state-owned commercial banks.

But in the United States, there is no such good thing. Citibank is a private joint-stock bank. Not to mention Citibank, the Federal Reserve that prints money. They are also joint-stock companies, not state-owned!

Your Citibank’s credit can only be your own. You can’t rely on anyone at all, and it’s impossible for someone else to help them take responsibility.

Because of this, Citibank is now facing such a big crisis, it will panic.

At this juncture, the extent to which Jabil came eagerly, naturally, he asked Xiao Qi for help.

"What do you want me to do?" Xiao Qi asked him.

"I hope that Citibank can buy more shares of Dreampad or Dreamstars from Qi Shao." Jabil said: "The shares of Dreampad and Dreamstars are good assets that people dream of! If Citibank can buy these shares of Fairy Company Shares, it proves that we have strong strength and strong capital. People will be assured of Citibank, and then there will be no runs. As long as we give us some more time, Citi will definitely survive."

He was right. In the previous life, Citigroup just survived abruptly, and then developed pretty well, far from the embarrassment of the five major investment banks.

This also stems from the fact that Citigroup’s background is too deep. It started business in China as early as the Qing Dynasty, and other European and American countries are the same. This commercial bank with a history of nearly 200 years, as long as it is not killed by a stick, it will definitely recover. Opportunity.

Looking at Jabil's nervousness now, Xiao Qi analyzed that it might be because Lehman Brothers fell too suddenly, and Citibank had long been planning to use the Fairy Company to make a name for themselves, so this came eagerly.

The shares of Fairy’s products are definitely not Citi’s only card. People from other factions must also be looking for other ways to save Citibank.

No matter how they fight with each other on weekdays, they also know that with Citibank, they can be powerful. Once Citibank fails, let alone fighting, even money power will be lost together.

It's just that whoever finds the best and most effective cards will gain greater benefits in the later process of meritorious deeds and rewards.

Since the release of the first Dreampad, the Fairy Company has become the darling of the investment market. Numerous companies and funds want to buy shares in Dreampad and Dreamstars. They dare not say holdings. As long as they have a little share, they are harder than gold. Currency not only has huge dividend profits, but also has long-term value-added and value-preserving functions.

It is a pity that so far, the Fairy Company has only sold shares once, and it is not for financing, but for forming an alliance to resist pressure from all quarters.

As a result, 20% of the shares did not enter the hands of ordinary investors at all ~ www.readwn.com ~ was only held in the hands of a few large companies and super rich people.

When will Fairy Company sell its shares for the second time, how much to sell, and who can get it, has always been a topic of heated discussion among financial investment companies on Wall Street and the world.

At this time of wind and rain, if Citibank announces to the public that it has acquired shares in the fairy companies dreampad or dreamstars, then it will be a great encouragement for any Citibank customer and it will definitely calm people's hearts!

Think about it, so many powerful super companies want to buy shares of dreampad and dreamstars, but I can buy it from Citibank. Doesn't it mean that I am better than them?

How can such a powerful company encounter bankruptcy?

Don't worry about it, right? (To be continued...)

ps: I don’t know if I write about the 2008 financial crisis like this, brothers can understand, if everyone can understand, then the show will be very happy, because the writing is easy to understand, ha ha.