Rebirth of the Financial Overlord

"Carrot head, we need a large number of financial companies in the European market, and London is the first stop. I hope you will solve this matter first."

Finance Company?

Robert John was a little confused.

The so-called finance company mainly refers to a short-term lending company, which can also be understood as a loan shark.

Of course, there are differences between formal financial companies and black-and-white loan sharks. Commercial bank loans often attach great importance to collateral. Without collateral, it is impossible to obtain loans from banks.

Money is something that everyone lacks.

If you need money and because the collateral has credit risk, the bank will raise the interest rate or cut off the loan according to the risk ratio, or the bank’s credit loan needs to be used after it expires, but it must be repaid to perform the contract before continuing to apply. At this time, the usefulness of the financial company is reflected.

You can lend funds with better risks, and you can also help some loans to carry out bridge loans.

Many financial companies in Hong Kong have been doing very well in this area. With high profits and leverage in operating financial products, they are very impressive.

It’s just that in recent years, the British economy has been sluggish. The Bank of England has continued to implement a low interest rate policy. The benchmark interest rate has been maintained at 2.2%. With such an interest rate, if a finance company makes a living by lending, there will be no profit at all.

"Boss. The Bank of England's benchmark interest rate has been maintained at 2.2%, and the countries of the European Community have also maintained the same interest rate. I don't think it is a good idea to open a financial company in Europe."

"NO, NO, Carrot Head, listen. We opened a finance company, not a finance company, we just opened a finance company, so we opened a finance company."

"."

Robert John is a Huaxia hand.

However, the face of Shen Jiannan's words was still full of bewilderment.

Glancing at the ex-wife's family who were about to get up not far away, Robert John said quietly.

"Boss. I don't understand what you're talking about."

"Carrot head. Rayson. The interest rates implemented by European countries have always been 2.2%, right?"

"Death at night. With this kind of interest rate, there is no room for finance companies to survive."

"What if there is a country with very high interest rates and a fixed exchange rate for foreign exchange prices?"

Robert John understood immediately.

"Boss. You mean Thailand? God. Boss, you're a genius. I never thought of that."

"Understood?"

"Damn it! I'm so stupid. God, boss, we're going to be rich."

Holding the phone, Robert John shouted excitedly.

Before that, he had been staying in China. As the head of the Standard Chartered China region, he was very clear about the exchange rates in the Asian market.

The currency of Thailand is the baht.

Before 1897, one baht was equal to 8 fuang, and one fuang was equal to 8att. The current decimal system (that is, 1 baht is equal to 100 satan) was established by King Rama V.

But the name before the 1940s was tical, and it was later renamed baht (baht). Originally, the baht was a unit of weight, equivalent to 15 grams. Since one tical was equivalent to 15 grams of silver, the baht was simply used as the name.

After the silver standard collapsed in 1902, the baht was no longer pegged to pure silver because the price of silver depreciated significantly relative to currencies on the gold standard. On September 19 of that year, Thailand issued the first batch of banknotes with denominations of 5, 10, 20, 100 and 1000tical.

By 1963, the Thai government announced that the gold content of the Thai baht was 0.0427245 grams, and the official exchange rate was 1 U.S. dollar equals 20.80 baht. At the same time, the floating exchange rate was stopped.

However, with the collapse of the Brinsenton system and the depreciation of the U.S. dollar, the Thai government announced that the Thai baht would be decoupled from the U.S. dollar and pegged to a basket of currencies. Limit the foreign exchange trading prices of commercial banks.

On November 5, 1984, the Thai baht depreciated by 14.8%, and the official exchange rate was 27.15 baht to the US dollar. After that, the Thai baht appreciated.

But since 1985, Thailand's economy has grown miraculously, and it has leaped to the top four Asian tigers with an astonishing growth rate. What's even more incredible is that Thailand's inflation rate has not been high, which shows that the fundamentals are very good, and there is a broader market. space.

In order to leave room for the economy to operate when it is exhausted, and to avoid excessive capital speculation, the Bank of Thailand has repeatedly raised interest rates, raising the benchmark interest rate to 6.8%.

The central bank changes the benchmark interest rate, generally to leave room for maneuver in the economic fluctuation cycle, and raises the interest rate, often because the economy is improving, curbs inflation and speculation, and leaves room for maneuver when the economic cycle changes.

Just like a trump card, the higher the interest rate, the better the country’s economy will be, leaving more room for maneuvering, and the lower the interest rate, the smaller the room for maneuvering. Generally, when the central bank lowers the interest rate to 0, it means that a country has played all its cards and has no ability to intervene, so it can only leave its fate to God.

The central bank of Thailand has raised interest rates continuously, which is nothing.

Thailand has become one of the four Asian tigers, and its economic development level shows signs of catching up with Hong Kong and Singapore. It is correct to raise interest rates to curb inflation and reduce speculative capital flows.

However, at the end of 1990, the Thai government determined the circulation policy of the free trading of Thai baht in the global foreign exchange market, and adopted a fixed exchange rate system to link the exchange rate of Thai baht to the US dollar and implement a fixed exchange rate system pegged to the US dollar. 1 US dollar = 25.29 baht, the exchange rate It is limited to a floating range of 0.15% to 0.16%.

If so, no problem.

In 1991, the Japanese stock market plummeted like a cliff, and then the real estate bubble burst, causing a large amount of capital to flee from the Japanese market.

As the world's second largest economic system, the amount of capital deposited in the Japanese market can be imagined. In order to strengthen the absorption of overseas capital, Thailand's central bank announced in May last year that it would fully liberalize financial controls and no longer restrict the inflow of overseas funds. Intervene.

Moreover, the Thai government announced that Thailand has the information to build a fair and free financial center. The financial industry will be fully liberalized in 1993, the establishment of an option financial center in Bangkok will be approved, the restrictions on foreign banks setting up branches in Thailand will be relaxed, and international capital will be allowed to trade in the Bangkok option financial center.

what does that mean?

This means that now that funds flow into Thailand, there will be no further intervention.

However, Thailand implements a fixed exchange rate system pegged to the U.S. dollar, and the interest rate is 6.8, while the interest rates of almost all countries in the European Community are 2.2%.

Robert John was so excited that he almost went crazy.

"Boss, you mean, we borrow funds from major European banks, and then go to Thailand for arbitrage?"

arbitrage?

Is Laozi such a worthless person?

Holding the phone, Shen Jiannan couldn't help but hook his lips.

Although borrowing chickens to lay eggs can also make money, but what is the money.

Counting the time, the Wall Street gang is about to attack the European Community. When the time comes, lending money to them will be the most interesting.

Grinding his teeth sinisterly, Shen Jiannan praised.

"Old Carrot. Congratulations, you got the answer right. I will rush over as soon as possible. Now, you need to build the financial company platform as soon as possible."

"."

After hanging up the phone, Robert John was still too excited to hold the phone.

As a bank practitioner, he knows very well that risks are always directly proportional to returns. In this world, there has never been an investment that can make a profit without losing money.

However, he suddenly discovered that this law seemed to be broken.

Thailand is a country, and behind the major European banks is also a country. There is no risk at all in Thailand with the money borrowed from banks here.

"Praise God. The glory be with me."

"Robert is that you?"

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