Rebirth Starts From 2006

Seeing that they all understood, Chen Yang stopped talking about this and said instead, "After talking about the outside, let's look at the inside.

On the surface, the current subprime mortgage crisis is due to the fact that after five or six years of skyrocketing housing prices in the United States, prices generally stopped rising and then fell. The housing bubble burst, causing many home buyers to cut off their mortgage payments and default on their mortgages, resulting in subprime mortgages. Thunderstorms in the bond market caused,

However, the deeper reason is that in order to pursue high profits, investment banks excessively used financial derivatives, that is, subprime bonds in the housing market, resulting in poor risk supervision and granting loans to many people who did not meet the lending conditions, which ultimately triggered the this financial crisis,

This can be proven by the fact that in this financial crisis, investment banks were the first to be hit and the biggest hit at the same time.

Today, the five major investment banks on Wall Street, Lehman Brothers went bankrupt, Bear Stearns and Merrill Lynch were acquired, and only Goldman Sachs and Morgan Stanley are left.

However, both Goldman Sachs and Morgan Stanley were also hit hard by the financial crisis, but they were lighter than the other three.

Although the Federal Reserve pushed Lehman Brothers out this time and used it as a scapegoat to calm the public's anger, Goldman Sachs and Morgan Stanley can also use this opportunity to step ashore on Lehman's wreckage.

But no matter what their outcome is, it proves one conclusion,"

Looking at the three people who were attentive, Chen Yang stretched out a finger and said seriously, "The pure investment banking model can be officially declared a failure!"

Is the pure investment banking model a failure? ? ?

Qin Yu and Huang Shan were both stunned.

This is a big proposition. It is enough for a Ph.D. in economics from Harvard Business School to write a graduation thesis, but it was thrown out by Boss Chen so lightly? !

The two of them immediately fell into deep thought,

If you think about it carefully, during this financial crisis, although many savings banks were also affected, either merged or went bankrupt,

But for big banks, the impact is not serious.

Even savings banks and investment banks are in exactly the opposite situation.

**** acquired Bear Stearns, and Bank of America acquired Merrill Lynch. Bank of America is currently the largest bank in the United States in terms of savings, followed by ****, which ranks second.

So, in a sense, this is not so much a financial crisis as it is an investment banking crisis? !

At this moment, Qin Yu suddenly thought of another point, and she looked at Chen Yang with a sudden realization.

"No wonder when we acquired a bankrupt financial company in the United States, you insisted on implementing a business balancing strategy instead of taking the more profitable pure investment banking route. Is this the original reason?!"

Leaving aside the central bank and policy banks, the main types of financial institutions include ordinary commercial banks, investment banks, securities companies, trust companies, asset management companies, financial leasing companies, foreign exchange brokers, insurance, trading and settlement, etc.

According to the type of market, it is divided into capital market and money market.

The capital market includes medium and long-term bank credit, securities (bonds and stocks), insurance, and financial leasing,

The money market includes interbank lending, repurchase agreements, commercial paper, bank acceptance bills, short-term government bonds, large denomination negotiable certificates of deposit, etc.

In other words, the business scope of the five financial companies previously acquired by Rainbow Group in the United States covers almost all types of capital and currency markets.

Don’t think that just because it’s big and comprehensive, it’s good.

Like many industries, financial companies also need to pay attention to professionalism.

Whether your main business is an ordinary commercial bank, investment banking, or other types of financial business, it is very important for mid-to-high-end customers!

They will choose whether to use your company to provide services for them based on your business expertise.

Only ordinary people who know nothing about finance would think that companies that have all kinds of businesses are the most powerful.

Otherwise, why didn’t the five major U.S. investment banks before this year engage in other businesses besides investment banking? !

Of course, the reasons are a bit complicated, but their own unwillingness is still the main reason.

Because the capital market is the most important component of the financial market and the core and cornerstone of modern finance,

Investment banks are the heart of the capital market. Their role in adjusting the economic structure and promoting economic development is irreplaceable in modern economic activities!

To be more precise, an investment bank is not actually a bank, but a non-bank financial institution that operates asset businesses. It is the main financial intermediary in the capital market.

For example, the bankrupt American New Century Bond Company and others are actually investment banks.

Therefore, one can naturally imagine the importance of investment banks to the entire financial market.

In a sense, investment banks are the shining jewel in the crown of the entire financial market.

The five major investment banks in the United States occupy the core and leading position in the global financial market. They earn the highest proportion of profits with the highest technical content in the financial field.

In this case, they certainly do not need to develop ordinary commercial banking business!

But now, everything has changed,

In Qin Yu's view, Boss Chen had foreseen this and insisted on developing business in the entire financial field based on the principle of balance.

Fortunately, I laughed at him for being greedy and greedy. It turned out that I was short-sighted!

Looking at Qin Yu who was full of admiration on the screen, Chen Yang blinked blankly and quickly realized,

"Ah, yes, that's what I thought!"

Both inside and outside the screen, the four of them chuckled.

After a brief silence, Zou Rong suddenly asked, "If the pure investment banking model cannot work, does that mean that those investment banks will transform in the future?"

Chen Yang turned to look at her and smiled, "This needs to be looked at in two parts. First of all, I said that the pure investment banking model has failed. It does not mean that pure investment banks cannot survive.

In fact, investment banking is always the most important part of the financial module.

However, what is associated with the higher profit level of investment banking business is that this type of business also carries greater risks.

When the scale is below a certain level, the risks are controllable and you can live quite a prosperous life by only doing investment banking business.

However, when an investment bank develops to the status of Lehman Brothers and Goldman Sachs, what they need to consider should not just be profits.

In other words, profits should be put at the back, and the first priority in the business process should be the ability to resist risks! "

Huang Shan nodded thoughtfully, "This is what you often say, whether a company can last for a long time does not depend on how high its profitability is, but how strong its ability to resist risks?!"

"right,"

Chen Yang nodded and said, "For large-scale enterprises, there are many opportunities to make money, at least it is easier than ordinary companies.

However, when risks come, whether it can withstand them is the key to testing the resilience of a company.

Companies with insufficient resilience against risks will face bankruptcy sooner or later.

Therefore, being able to endure temptation and loneliness is the long-term way to run a business! "

This high-pitched singing made the three beauties roll their eyes.

Still able to withstand temptation and loneliness,

Go and see for yourself how many companies Honggu Capital has invested in now, and how many industries it is involved in!

Okay, even if we don’t mention the companies in which we participate, what about the ones you founded yourself?

First came real estate, then communications, then the Internet, new energy, big data, cultural media...

Is this how you can stay lonely? !

Boss Chen was thick-skinned and pretended not to notice, and said to Qin Yu without changing his expression,

"I infer that two major events will happen in the U.S. financial sector next. First, the U.S. government will relax controls on banking operations and allow investment banking companies to directly operate commercial banking businesses!"

In order to prevent the emergence of super trusts, especially in the field of financial capital that can shake the foundation of the economy, the United States has the most stringent regulatory restrictions in the world.

Fortunately, commercial banks can develop investment banking business through business cooperation, comprehensive operations, financial holdings, etc., but the scale of the business will be limited.

But for investment banks, they cannot directly develop commercial banking business.

So for a long time, **** could acquire Bear Stearns, and Rainbow Group could acquire five financial companies, but no investment bank would acquire commercial banks.

If an investment bank wants to operate across businesses, it can only do so through indirect investment, not even in the form of group subsidiaries.

For example, invest some money and set up a bank that is not related to the main business.

Of course, as long as investment banks want to do business in this area, there will always be ways to do it under the management framework, but there will be no direct correlation.

But now, investment banks are facing the most serious existential crisis in history. Even from the perspective of stabilizing the economy, the United States must relax restrictions in this area and allow investment banks to operate commercial banking businesses.

At least it can be operated as a group subsidiary,

Otherwise, even if they survive this crisis, these investment banks may not be able to escape the next one!

In fact, starting from the "Interim Regulations on the Intermediary Business of Commercial Banks" issued in 2001, our country began to relax controls on the investment banking business of commercial banks.

Prior to this, commercial banks could only carry out currency business and were absolutely not allowed to get involved in the capital market. On the other hand, management was even stricter!

Pull it back,

Chen Yang took a sip of water and continued without waiting for Huang Shan and Qin Yu to speak, "Secondly, Goldman Sachs and Morgan Stanley will definitely change their business models and increase the business types of commercial banks,"

Having said this, Chen Yang paused and smiled meaningfully, "The most important thing is that they will definitely seek to become shareholders of the Federal Reserve Bank of New York!"

After Boss Chen finished speaking, Huang Shan had the chance to speak. She looked at Chen Yang with hesitation and said,

"I understand what you mean, but will the Fed really make changes?"

Yes, the key point in this matter is not Goldman Sachs and Morgan Stanley, but the Federal Reserve. They hold the power to formulate financial policies in the United States, and their every move attracts global attention.

If anyone can completely save this financial crisis, it is definitely the Federal Reserve.

Because the root cause of the financial crisis lies in the United States, and they are responsible for the disaster. If they don’t solve it, who can? !

On the screen, Qin Yu frowned in thought and remained silent.

After Huang Shan finished speaking, Chen Yang smiled. When she was about to explain, she suddenly took out her mobile phone and made a call.

Chen Yang and Huang Shan looked at each other and fell silent.

After a while, Qin Yu hung up the phone and said to the camera, "I have asked Shirley to inquire about the news!"

Chen Yang raised his forehead slightly, looked at her and smiled, "Mr. Yu, how about a bet?"

Qin Yu's face fell, "No fight!"

Convinced or not, I'm crazy to bet with you!

Besides, after her boss's analysis, she also believed that the Federal Reserve would change its financial control policy, and she would not bet with him.

Huang Shan also covered her eyes in confusion, then quickly let go, looked at him and said, "If the Federal Reserve can relax its control, of course it can end the financial crisis quickly.

However, I remember that Volcker is a staunch risk control fan. With his influence in the Fed, is it really that easy for the Fed to relax controls? "

The current Chairman of the Federal Reserve, Bernanke, took office in 2006. Before Bernanke, the legendary figure in the American financial circle, Alan Greenspan, had occupied this position for 19 years.

Before Greenspan, the person who served as chairman of the Federal Reserve was Paul Volcker, who served for eight years.

Many Fed bosses, including Greenspan, have great respect for the legendary financier. If Volcker firmly opposes something, even the Fed will seriously consider it again and again.

In fact, just a year and a half later, Omar's classmate at the time followed the financial veteran's advice and issued the "Volcker Rule" bill aimed at major reforms in the U.S. banking industry.

The core of this bill is to prohibit commercial banks from engaging in proprietary investment business, as well as prohibit banks from owning, investing in or launching hedge funds and private equity funds.

At the same time, it also limits the scale of commercial banks and stipulates that any financial institution shall not account for more than 10% of the savings deposit market. This regulation has also been extended to other areas such as non-deposit funds to limit the growth and merger of financial institutions. ,

This shows the attitude of this financial veteran.

Now that the business management restrictions on investment banks are to be relaxed, it is hard to say whether this veteran will jump out and oppose it.

But Boss Chen, who knew the result, had no intention of worrying at all. He smiled calmly and said,

"As I said before, times have changed. Mr. Volcker has indeed always attached great importance to risk control of financial institutions. However, the most important thing right now is to solve the financial crisis caused by subprime mortgages.

The best way to resolve this crisis is to get the U.S. investment banking market out of trouble and regain its vitality at the root.

Besides, isn’t it also a risk control method for investment banks to develop commercial banking business? "

Chen Yang spread his hands, shrugged and said, "As long as Goldman Sachs and Morgan Stanley become member shareholders of the Federal Reserve, if they have a similar crisis in the future, the Federal Reserve can legitimately launch a rescue for them.

At the same time, investment banking institutions that were previously outside the Fed will naturally be under the control of the Fed.

If cooperation can benefit both parties, why not do it! "