King

With a word of "avoiding suspicion", Hudson changed himself from the protagonist to a member of the public. The princes and ministers who were preparing to bargain were dumbfounded.

If the parties involved don’t care anymore, how can they bargain?

Not everyone is a financial novice like Count Linares. Prime Minister Delgado, a former finance minister, keenly noticed something was wrong.

Although he has never run a bank, he still knows that doing business requires operating costs.

If the bank's operating costs remain unchanged and loan interest rates do not increase, the taxes siphoned off will be dug out of pure profits.

Even if the net profit can reach 50%, this cut will still take away 60% of the bank's profits.

It would be strange if the nobles who drew blood so harshly and touched their own interests would not get angry.

I originally wanted to bargain with Hudson, find out the bottom line of the bank's operations, and then determine the specific tax rate, but the person involved refused to cooperate.

Even though Count Linares proposed an ultra-high interest rate of three points, Hudson remained indifferent.

There was no other way, Marquis Delgado could only turn his attention to Caesar IV for help.

Many people present were involved in investment banks, but only the Koslow family and the royal family had control over banking experience.

"Ahem..."

After pretending to cough twice, Caesar IV slowly said: "The bank's profits are not as high as you expected.

After amortizing operating costs, capital costs, and risk gains and losses, the loan interest rate must be at least seven or eight points to achieve breakeven.

Currently, the only one that can reduce costs is the Near East Development Bank.

If a three-point tax rate is directly introduced, it will inevitably lead to an increase in loan interest rates and seriously affect the domestic economic recovery. "

It's all true. The operating costs of the Royal Bank are that high.

The operating costs of most banks on the market are similar to this number, or even higher.

On the one hand, the scale is too small to amortize operating costs. On the other hand, the cost of cash transportation is too high, and fund transfers between outlets are frequent.

The Near East Development Bank has the advantage of scale and gold tickets to assist transactions, so our withdrawal rate is much lower than other banks.

The utilization rate of the same cash flow in the hands of the Near East Development Bank is more than three times higher than that of them.

In addition to the interest rate difference on funds, exchange fees are also a large amount of income, which small banks can only covet.

Even if Hudson himself borrowed a large amount in vain and inflated operating costs, it only brought the loan breakeven to more than two points.

If the book data were not beautiful enough, shareholders would not inject capital again and again.

Of course, we can’t blame our colleagues for not doing their best. Everyone is still in the exploratory stage, still stuck in how many deposits they have to lend as much as they can, and they simply don’t know how to increase leverage in a cycle.

To be precise, the savings are not much. A large part of the money used for lending was raised by shareholders themselves.

If it weren't for the success story of the Near East Development Bank, everyone would have been unwilling to let their investment go to waste. They would have closed down long ago and would have been too lazy to earn this hard-earned money.

After understanding the truth, everyone's first reaction was that it was impossible!

It's really an exaggeration. The bank's operating costs are so high, so where are the huge profits?

However, considering that these words were spoken by the king himself, unless he was deceived by his subordinates, there could be no problem with the authenticity of the data.

There are many large and small banks in China, and it is very easy to verify. Even if someone deceives them, they would not dare to do it so obviously.

If the data is true, things suddenly become embarrassing.

There are 180 large and small financial institutions in the country, and the real money-making ones are the Near East Development Bank and loan sharks that are not on the table.

It is impossible to treat them differently. It is okay to crack down on loan sharks. A high tax rate is imposed specifically on the Near East Development Bank. It is estimated that they will be slapped when they leave the palace.

Even if it is enacted, such a bill that violates the principle of fairness will not be passed by the noble parliament.

Realizing this, cold sweat broke out on Count Linares' forehead.

It's really scary. His proposal is actually cutting off everyone's financial resources.

Fortunately, he did not pass directly, otherwise it is unknown whether he would be able to see the sun tomorrow.

"Your Majesty is right. The Royal Government has been cracking down on usury and must not raise loan interest rates.

I think the tax rate should be set at 0.5%!

Now that there is a new lending platform, for the healthy development of the kingdom's economy, those unscrupulous loan sharks should also be banned.

I propose to enact a law that clearly stipulates the maximum interest rate for private loans. Once the loan exceeds the limit, it will be directly deemed invalid! "

Prime Minister Delgado said righteously.

There is no doubt that this is a remedy for the mistake just now.

Although the proposal was put forward by Count Linares, it was also discussed at an internal government meeting.

To collect taxes these days, laws alone are not enough. Taxpayers’ cooperation is also required.

After collecting taxes from banks, it is natural to give positive feedback, such as cracking down on loan sharks, the bank's competitors.

Otherwise, the bank would be bent on making false accounts, and laymen like the tax department might not be able to find out who they are.

Not being able to take the opportunity to kill his competitor, Hudson secretly said it was a pity and then returned to normal.

Idiots are only a minority after all.

The introduction of brainless policies is either due to ignorance or interests.

The king owns a bank, so it is obviously impossible to formulate policies that kill his own industry.

Whether the tax rate is high or low, the Near East Development Bank is the beneficiary. What's more, it also comes with a bill to combat loan sharking.

“The prime minister is right, loan sharking really shouldn’t exist.

Nobles must have the responsibilities of nobility and cannot be mercenary!

I propose to limit all domestic lending interest rates to no more than 12%, and to ensure that loans are disbursed in full, and to prohibit additional fees in any name.

Violators found to be in violation will not only have to return their illegal gains, but also have their loan principal confiscated and be banned from engaging in financial business for life.

In order to ensure the implementation of the bill, the Royal Government should also encourage everyone to report loan sharking.

Once verified, the whistleblower can obtain half of the lender's property! "

As soon as Hudson's words fell, everyone immediately looked at each other.

I have seen cruel people, but I have never seen such cruel people. Wherever they are cracking down on loan sharks, they are clearly trying to kill the loan sharks.

Once the law is implemented, the powerful nobles across the kingdom will attack the loan sharks hard.

Being able to legally annex half of the other party's family property and gain a good reputation, who can refuse!

No one reacted, but Caesar IV was complaining secretly.

The mainstream interest rate of banks is 10%, but there are various add-ons. There are many real interest rates exceeding 20%.

There is no way, even small banks have to make money!

Its own costs are high, and if it wants to maintain high profits, it is natural that it can only find ways to raise loan interest rates.

In addition to its first-mover scale advantage, the Near East Development Bank's unattached loan interest rate is also an important competitiveness.

In fact, this is also the reason why small banks have high bad debt rates.

Who is willing to bear higher interest rates when they can get lower interest rates?

Only customers who cannot pass the loan approval or have connections within small banks will choose them.

Hudson's proposal was clearly that he would not play, and he would not allow others to play.

But the reason is too legitimate, and there is nothing wrong with it on the face of it.

For the benefit of the kingdom, as the biggest vested interest, Hudson was willing to sacrifice his own interests.

Caesar IV, who is your king, can't object even more.

The princes and ministers did not respond. That was because they had not participated in management and operations and had no idea what it meant.

Including Caesar IV, if the Near East Development Bank had not deliberately paid attention to the operation of the Royal Bank after it distributed dividends, he would not have known that there were so many pitfalls in it.

Seeing that everyone agreed, Caesar IV also stopped talking.

If he makes less money, then he should make less money. Anyway, when the kingdom develops, he is the biggest beneficiary.

…

"Marshal, I would like to ask you, how much is the current total amount of private loans in the Kingdom?"

Count Francis, the finance minister, asked with concern.

When it comes to credit data, no one has a better say than Hudson.

Although the market share of the Near East Development Bank is less than one-third, it receives all major clients and earns more than 90% of the profits in the industry.

Using data from the Near East Development Bank, a relatively accurate figure can be obtained by direct calculation, and the Ministry of Finance's tax collection expectations can be obtained.

"It is estimated from past data that the current total amount of private lending business is about 800 million gold coins.

Compared with half a year ago, it has dropped by nearly 200 million, and may continue to decline in the future.

The specifics will depend on your income in the Papal States.

According to internal estimates of the Near East Development Bank, it may drop to about 600 million, and the bank's business accounts for about 60% of the share.

Nobles do not have the habit of owing money for a long time. If nothing happens, the total loan amount will continue to decline in the next three years.

It will eventually stabilize around 500 million, and then start a new round of growth. This growth rate mainly depends on the kingdom’s future economic development.

The kingdom's current critical debt level is approximately one billion gold coins. Beyond this number, aristocrats would go bankrupt on a massive scale.

Based on a tax rate of 0.5%, the Ministry of Finance can collect at least 3 million gold coins this year and a maximum of 4 million gold coins. "

Hudson's answer disappointed everyone.

Three to four million gold coins is a huge amount of money anywhere, but in the royal government, it is a drop in the bucket.

The most critical thing is that this income will continue to decrease in the next three years.

It is very simple to increase financial taxes, carry out in-depth social reforms, and make the cake bigger.

The noble lords all have stable income. In peacetime, except for the emerging nobles who need loans, others will just keep paying back.

Even for these emerging aristocrats, their first reaction when they have money is to pay off their debts first. If they are short of money later, they can borrow it later.

For individuals, it really saves money in interest. But for banks, this is a big disadvantage.

As for groups outside the nobility, they are not mainstream customers. At present, more than 80% of the credit business of the Near East Development Bank comes from the nobles.

Compared with the nobility's continuous reduction of debt holdings, businessmen's loans have indeed continued to grow. Unfortunately, the base is too low, and the risk of debt default is also higher.

The broader freedmen's market is not yet a market. The effort is not proportional to the return, and only some loan sharks are eyeing this area.

Of course, it is not that there are no new customers at all, and the Royal Government is the largest customer.

As long as banks dare to lend at low interest rates, the Royal Government does not mind handing over all debts to them and letting everyone earn the interest.

In theory, lending money directly to the Royal Government can save a lot of customer finding costs and subsequent maintenance costs.

Unfortunately, all commercial banks have doubts about the repayment ability of this large customer.

If there were really no risk, everyone would rush to pay an interest rate of six points, and four or five points would not be unnegotiable.

"Don't be too disappointed. Something is better than nothing. The kingdom's economy has just begun to pick up, and it is impossible to generate a large amount of tax revenue.

This additional revenue will not only make up for the shortfall caused by the tax reform, but will also provide additional debt repayment funds.

If the income from the Papal State is greater, perhaps our financial pressure can be easily solved! "

As he spoke, Caesar IV's heart was bleeding.

Hudson, the founder of the bank, actually predicted a downturn in the industry in the next three years. This is not a good thing for the Royal Bank, which has only meager profits.

I'm speechless when I think about it. It's possible for nobles to repay their loans in advance and even repay the lenders to death.

Knowing it all, Caesar IV was still powerless.

In order not to lose money, deep down in his heart, he had decided to stop the expansion plan of the Royal Bank.

It's better to be conservative at times like this. It would be a tragedy if outlets were set up in various places but no customers came to visit.

The biggest expense of small banks is not the endless occurrence of bad debts, but the high cost of fund mobilization.

But this is another vicious cycle!

There are not enough customers to spread the costs, so we can only shrink our business outlets to reduce operating costs.

However, the fewer outlets there are, the less attractive it is to customers.

Especially for businessmen and mercenary groups running around, in order to facilitate their withdrawals, they can only choose banks with many branches to cooperate.

…

When the dust settled, Hudson knew that things were about to change in the kingdom's financial world.

There are now hundreds of financial institutions, and there is a high probability that no more than 30 will survive in the end.

Private loan sharks will only die more miserably.

The Royal Government currently has no money and resorts to normal means to collect taxes, which will be difficult to achieve in the short term.

The best choice is naturally to pick a fat sheep and kill it for meat.

Obviously, this doesn't work. Although the Development of the Near East has gained weight now, it is still a fierce tiger.

All the Royal Government can do is to catch a few rabbits and kill them to satisfy their greed.

The loan shark gangs that cannot be brought to the forefront are the best targets to hunt down.

Even legal issues were resolved at this meeting.

…

After everything had settled, a familiar voice came to Hudson's ears as soon as he left the hall.

"marshal……"

Without any hesitation, Hudson immediately summoned Maxim and left in the air.

As a result, he went out in a hurry and crashed directly into the roof of the palace. The falling rubble also injured two guards on duty.

Seeing this scene, Hudson threw down two bottles of magic potion and hurried away. If it weren't for the magic shield holding him up, he might also be injured.

The unlucky thing had just begun. After two hours of traveling through the clouds, he collided with a group of "sound-cracking beasts".

Naturally, the fight didn't start. Maxim's body lit up, causing all the crackling beasts to flee in all directions.

But the screams he made during his panicked escape still made Hudson sick to his stomach.

It’s true, the legend of the Lady of Doom is most likely true.

Otherwise there wouldn’t be so many coincidences!

It's unbelievable that a giant dragon would accidentally hit a house; the crackling beast is a rare animal, usually one is rarely seen, but this time it actually crashed into a group of them.

If it weren't for the two sacred bodyguards, it wouldn't be strange to encounter so many accidents and trap an ordinary eighth-level powerhouse to death.

Fortunately, nothing else happened in the rest of the journey, otherwise Hudson would have run back to the capital to settle the score with the instigator.

…

In the Emerald Palace, Princess Madeleine stamped her feet angrily. She has always been the most eye-catching kid for so many years, but now everyone avoids her when they see her.

"snort!"

"coward!"

"If I had known this earlier, I wouldn't have told you and would have directly tricked you to death..."

She was shouting loudly, but deep down in her heart, Princess Madeleine was restless. The royal family was still able to survive after accidentally taking away a few unlucky second generations, but if the marshal of the kingdom also had an accident, she would not be able to end it.