Thousands of sparks

Chapter 160 Surprise?frightened!
Since he wanted to take the opportunity to do something, Dusand naturally wanted to appoint a trustworthy person to investigate the Royal Bank of Newsail.Logically speaking, the Royal Bank's business model should not have the risk of "poor management and bankruptcy" at all.

After all, the core of Royal Bank's business is fund brokers. They do not accept customer deposits, but lend the funds entrusted to them by customers to the fund demanders at a specific interest rate.Without its own funds, and without engaging in large-scale deposits, Royal Bank's business operations are elementary, but it is still very difficult to lose money...

What kind of insane method did this group of insects use to turn a bank with the right to issue currency into what it is now?
Du Sande carefully appointed two independent accounting firms to investigate this. In order to ensure that the investigation would not startle the snake, he even let Aika participate in the investigation of these accounting firms-the investigators did not directly contact the bank. people who have had any contact with them, and they don't know what they're investigating.All the materials they need will be "obtained" by Aika's people, and then delivered.

Such strict double-blind measures can definitely minimize the risk of the investigation being detected, but... Dusand still overestimated the wisdom of these big brains of the Royal Bank.

The ledger obtained by Aika is detailed, and the Royal Bank has no intention of covering up its actions at all.Everything is on the bright side, to the point of being confusing.

"This group of people... is simply fearless." Only three days into the investigation, Du Sande looked at the four-inch-high report in front of him, and then let out a sigh of emotion.

The reports were part of an initial audit of Royal Bank of Newsale by two accounting firms -- they hadn't had time to dig into the data or evaluate it any further through financial records.In other words, the two accounting firms found so many non-compliance operations just relying on the superficial content of the not-so-comprehensive books brought by Aika.

This "partial result" Du Sande has not yet had time to take a closer look, but the responsible accounting directors of the two accounting firms have already issued a protest to Du Sande.The content of the protest was dumbfounding. The original words of the two directors were as follows: "If Aika doesn't trust my professional ability, you can go to other accounting firms to conduct audits-don't use such absurd things. They are 'testing' us with clearly false accounts."

All in all, in the Royal Bank's "sincere" book records, it is easy to understand how this bank with the right to issue currency has fallen to where it is today.

Royal Bank of Newsale started a very "forward-looking" business 27 years ago, using its own funds to provide financing services for capital demanders.

Of course, such businesses will naturally appear in the world—after all, in human society, there are always more people who lack money than people who have more money and have no place to spend.If the bank only conducts financial brokerage business, there will inevitably be a situation where many "high-quality customers" cannot obtain financing at all.

That being the case, why not use your own funds for financing business? The bank manager who proposed this idea 27 years ago was surprisingly courageous. He used the three payments of 15 gold pounds received in advance to purchase the Imperial War Bonds to carry out a two-month short-term financing business.

Two months later, the principal of 15 gold pounds was successfully recovered, and the manager also received 280 gold pounds in interest and [-] gold pounds in service fees.

This business quickly became a hot spot for everyone in the Royal Bank of Newsail. As long as you can get a cash with no interest payment or a very low interest level, you can get several money within a few months. The reward of thousands of pounds.

The Royal Bank of Newsail, which does not carry out the business of taking deposits from the public, has a very limited amount of its own funds, so they first paid attention to the war bonds that have the effect of statutory compulsory purchase.

The Royal Bank of Newsale printed and issued several war bonds through its own mint department, and then used the original distribution channels to forcibly apportion them to many departments and factories in Newsale.

Of course, even if the great brains of the Royal Bank of Newsail were given a hundred more guts, they would not dare to just occupy the funds collected by the war bond.

After the war bond is issued, there will be a "issuance period" of about half a year.As long as the funds are transferred to Olin after the end of this issuance period, it is not considered a "private bond"-it is an early issuance, and it is still an affirmative action that can be commended.

Other banks do not do this, mainly because apportioning public debt will lead to a significant reduction in cash in the hands of customers. After the cash is reduced, customers will naturally be less willing to put their own funds in the bank.To put it bluntly, the reason why they don't issue bonds early is to protect their own interests.

However, Royal Bank of Newsale has developed an "unimagined" path. They repeatedly use public bond issuance to cash out, and then use the funds collected from the public bond to lend out during the issuance period to obtain interest and service fees.

After playing this way for seven or eight years, the bankers who are used to making huge profits are once again eager to move.They quickly turned their attention to their own right to issue currency - since we can print money ourselves, why bother to issue bonds in advance?

Soon, Royal Bank of Newsale began an imperial version of quantitative easing.They directly created a lot of gold pounds, and then put these "out of thin air" funds into the loan and bond market.

A large amount of funds poured into the market, which of course can greatly meet the demand for loans and allow more funds to enter the real economy.But the precondition is that the capital interest rate must be lower than the net interest rate of the real economy industry, and it must also be ensured that banks will not suddenly withdraw loans during the construction of the real economy.

Under the previous New Zealand financial system, it was impossible for small and medium-sized enterprises to become loan targets.On the one hand, they do not have the ability to repay the loans, and on the other hand, they lack sufficiently high net profit margins and stable prospects.Therefore, only large corporations can get loans from the banking system in Newsale.

However, after the Newsail Royal Bank began to have a large amount of its own funds, the loan needs of small and medium-sized enterprises also entered their field of vision.Mosquito legs are still meat no matter how small they are, not to mention the small and medium-sized enterprises in Newsail.If this market can be developed, the profit will be very considerable.

In order to stimulate the market, the Royal Bank of Newsale even began to relax the loan audit conditions. As long as more than two guarantees can be found, the loan can be issued quickly.In order to prevent some small and medium-sized enterprises from repaying their loans, the Royal Bank has deliberately raised the comprehensive loan interest rate.That way, as long as no more than one-third of businesses go bankrupt and cannot repay their loans, their funds are safe.

However, the ideal is full, but the reality is horribly skinny.The small and medium-sized enterprises that come to borrow money seem to have a good prospect, but in fact... there are basically only one type of people who come to get loans.

Gangsters engaged in loan sharks in Newsale.

These gangsters organized a large number of small and medium-sized enterprises to obtain loans by using the enterprises they controlled, or simply by threatening blackmail.After obtaining a loan, they then break up the entire loan into individual amounts and lend it to gamblers, alcoholics, and other individuals in dire need of money.

That's how Lord Harold got his start.

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Due to the lack of supervision and the excessive "lending demand", a large amount of its own funds were seized and turned into bad debts. The scale even quickly occupied more than 90% of the funds of Royal Bank of Newsale.When the Royal Bank of Newsail discovered this situation... the old buddies in the whole Newsail had already borrowed about 900 million gold pounds from the Royal Bank of Newsail.

About 2000 million pounds here are the "self-owned funds" that the Royal Bank of Newsail has used in various ways before, while the remaining 900 million pounds belong to the aristocratic groups and big business owners in Newsail .

At that instant, Royal Bank of Newsale was effectively bankrupt.But they still wanted to struggle, so...they turned their minds to minting rights.

It is impossible to print 900 million gold pounds in one go.The Mint of the Royal Bank of Newsail was printing at a maximum speed of about 800 million gold pounds per month.The minting tasks assigned by the Colonial Office every month are between 300 million and 600 million gold pounds.

RBC Newsale had to use various means and means to delay repayment until they had enough cash.So they began to ask the lender to roll over the repayment again and again, and kept raising the interest rate in order to achieve the goal.

Now, the principal of 900 million pounds has not been repaid, and the annualized rate of return has soared to an astonishing 37%.

And Royal Bank of Newsale has been completely screwed.Relying on their privileges of issuing currency, they continue to blackmail Newsail Colonial Hall-if you don't save me, I will die for you.After death, the economy of the entire colony can be brought down by the way, leaving behind a group of distraught nobles who have been borrowed nearly 6000 million gold pounds.

Although the Royal Bank is so bad, they have indirectly become the source of Newsale's rapid economic development in the past 27 years to a certain extent.Of course, the central bank’s large-scale release of water has fattened many gangsters who specialize in private lending, but they have indeed increased the money supply in the market while lending usury.Due to the close connection between Newsail and the entire imperial colonial system, the Royal Bank of Newsail has continuously issued more than 27 million pounds of funds in [-] years, which did not even cause fluctuations in the entire imperial financial system.

More Newsail civilians got loans, and they began to have the opportunity to build their own property—even if four-fifths of this property had to be owned by the gangsters who lent money.And as these civilians gradually achieved success, Newsale's economy also became active.

But now... it's time to pay the bills.

Dusande sat in his office, looking at the bad debts in front of him, his face ashen.

(End of this chapter)