The Federal Deposit Insurance Plan was 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 Plan also means that a bank is supervised by the U.S. government. But compared to joining the Federal Reserve System, the intensity of this supervision is much smaller...

The reason is that Carter believes that the core difference should lie in the differences between the two regulatory entities.

Let’s talk about the Federal Reserve System first. The supervision of the Federal Reserve System originates from the Federal Reserve. This is a serious government department, an administrative unit. To put it simply, it has no revenue mission. Its core mission is to ensure stability.

Ensure the adequacy and stability of the U.S. national currency reserves.

The supervision of FDI 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, company! Company! Company!

They are called companies, so obviously, apart from their regulatory functions, they are no different from a normal commercial insurance company. They also want to make money!

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

The different natures of the two directly determine the focus and intensity of supervision between the two.

To put it simply, it is the supervision of the Federal Reserve system, which cares more about the safety of funds! It also cares about the safety and stability of the overall currency reserves of the Federal Reserve system, which is composed of various large and small savings banks. Therefore, any funds that do not flow within the rules will cause them to

I pay great attention and attention to it, for fear that everyone will do this, and eventually the entire fund reserve plan will be riddled with holes...

In other words, the purpose of the Federal Reserve System is stability! As long as it is stable, it doesn't matter whether you are big or small. As long as you don't move around or mess around, we will be good friends!

But the Federal Deposit Insurance Corporation is different. Instead, it hopes that all the banks that join its plan will be profitable and make money. Because these banks have grown and become larger, they can absorb more depositors' deposits, which means that

The annual insurance premiums paid for it are also high!

Therefore, it doesn’t care at all whether you abide by the rules or not. Whether it’s messing around or doing all the tricks, it doesn’t matter to fdic! Its worry lies more in: Will your stupid behavior bankrupt the bank?

Then I'm asked to pay for the insurance...

As long as you don't go bankrupt and don't let FDI pay out money to compensate depositors, but instead steadily send him insurance premiums every year, and even send more and more, then you and FDI will be good friends! Even if you engage in some illegal operations, they will come forward to help you.

cover...

Based on concerns about bank bankruptcy risks, FDI's regulatory focus and regulatory direction have become clear. There is only one core indicator: asset risk ratio, risk-based capital ratio!

In this era when electronic statements have not yet appeared, information and data exchange are relatively primitive. FDI's review is usually on an annual basis. When the time comes, they will send out auditors to conduct an audit of the assets and data of each bank within the plan.

Statistics on risky assets.

According to the statistical results, they will divide each bank into five levels: more than 10% are in good asset condition; 8% to 10% are capital sufficient; 6% to 8% are capital deficient; 2% to 6% are seriously insufficient capital.

; 2% and below is an extreme lack of capital!

According to the agreement to join the insurance plan, when the proportion of risky assets of a savings bank in the plan falls below 2%, the Federal Deposit Insurance Corporation has the right to directly take over the bank and conduct bankruptcy reorganization.

Usually, their handling method is very simple and crude. If allowed by local laws and regulations, they directly package the deposits and debts of the extremely undercapitalized bank and sell them to a nearby bank with good assets or sufficient capital.

This is a very common, even the most common method in bank mergers. It is also very coercive. For the original bank boss, the agreement is clearly stipulated. If you do not manage well, the risk capital ratio will be reduced.

If it falls below 2%, you automatically lose 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 are even worried that they will not be able to find a "takeover" for a while.

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This situation can be said to hit it off immediately, and the merger of another bank can be completed without any resistance. However, this method is not very common in this era...

The reason is still the same. The relatively backward information transmission efficiency will make the FDI supervision full of loopholes. For example, the yin and yang contract that will often explode in the Chinese film and television industry in the future is also very common in the American banking circle in these years.

Before the review comes, it is often the peak period for banks to borrow from each other. These borrowings will enter the bank's public account in the form of capital injection and be included in the bank's total assets as bank capital, in order to improve their own assets during the FDI review.

The proportion of risky assets. After you get through it, you will return it with interest.

Even for ordinary small savings banks, the biggest demand for borrowings is often to cope with inspections. If this trick is used too often, FDI is not a fool.

After finishing the annual statistics, I went back and took a closer look. On one side was a scene that looked prosperous. All the banks were so rich, and the people were so rich.

On the other side, there are always some banks that previously showed good asset status, but suddenly collapsed. There is nothing fishy about this dramatic contrast, and no one would believe it.

As a result, the FDI's review has become more stringent. Last year, Black Bank narrowed its loans in the second half of the year and recovered more loans in the form of land and other fixed assets, reducing risky assets. This was considered a lucky pass.

Carter believes that in the near future, after the FDI review data is completed, some working groups will be dispatched to start bankruptcies of some banks.

And Carter was waiting for such an opportunity. If a bank collapsed near Douglas, then he who was closer would be the best candidate to take over!

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

Merging one's own Black Bank through FDI is basically impossible unless one's own bank suffers from extreme capital shortage.

Especially now that I have entrusted Julian to close the gold position and will soon have a large amount of funds in my account. It is not easy to increase the capital ratio.

Directly inject 20 million funds into it, and the ratio will immediately skyrocket...

Then look at the third category, which is the banks that have neither joined the Federal Reserve System nor the Federal Deposit Insurance Plan!

This type of bank will be rare in the future. But in these days, there are still a lot of them. This kind of wildly growing bank is the bank with the most variables! It is also the bank that is most likely to take someone by surprise.
Chapter completed!