Darkstone Code-Chapter 764 - 0762 As long as the money is right, I can sell it myself
"Here is your money, please take it."
In the bank, the teller girl placed the cash requested by a customer on the counter and thoughtfully provided an envelope to hold the money.
The amount withdrawn by the customer was not much, only two thousand one hundred, along with some loose change, easily fitting into one envelope.
He counted the money twice at the counter before a slight smile of relief appeared on his face, and then he bid farewell to the teller girl and left. 𝚏𝐫𝚎𝗲𝕨𝐞𝐛𝕟𝚘𝐯𝚎𝗹.𝕔𝐨𝗺
The next customer walked up to the counter, and the girl, as if by instinct, smiled and said the familiar phrases again.
What struck her as slightly odd was that this woman, who appeared to be in her fifties, also came to withdraw money and to take out everything in her account.
She sensed something unusual, but the feeling came and went quickly. She was working and didn’t have time to ponder these things, so she started attending to this lady.
A few minutes later, the cash of five thousand was neatly stacked on the counter. The female customer mumbled something after counting the money and then left with it.
Before the next customer approached, the teller girl glanced at the other counters with a bit of confusion because it seemed every window was dealing with withdrawals.
As the next customer arrived, she had to refocus on her work; the long queue left her little time to think.
This scene was not only occurring in the Imperial Royal Bank but also in all banks throughout the Imperial Capital and nearby cities, spreading rapidly to other places in an inexplicable manner.
A "little secret" circulating among people was like a prank—a joke that the bank had run out of money.
Yes, "The bank has no money," was the entirety of this rumor, yet during its spread, people could hardly refrain from adding new information to enrich it, making it seem less of a joke.
From "many people are withdrawing money from banks" to "some banks have already run out of cash," to "I heard recent events involve some banks that have been temporarily closed down," and finally to "banks are about to collapse."
The rumor developed without taking much time. In two to three days, it spread rapidly like bacteria in a petri dish in a perfect environment.
And all of this led to a terrible phenomenon.
A bank run!
Any bank’s greatest fear is a bank run. For instance, take Bail Federal as an example. Suppose a bank has deposits of one million; all that money surely wouldn’t be in the bank’s vault, as bankers plan to earn money with it.
Here’s a problem: out of the one million deposits, how much can a bank take out for investment or other purposes?
Banks in the Federation are categorized into different levels, depending on the tier and regional policies, with deposit reserve requirements ranging from as much as fifty percent to as low as twelve percent of deposits.
This means that banks can keep as little as one hundred and twenty thousand out of a million, using the remaining eight hundred eighty thousand for lending or investment, or at most, they must keep five hundred thousand as a reserve, using the other half for various purposes.
However, there’s a loophole: for instance, Bank B guarantees Bank A. If Bank A experiences a bank run or cannot pay depositors, Bank B will allocate funds to solve those problems.
They can sign a bilateral agreement, enabling Bank A to use depositor funds for maximum loans or investments.
The Federation’s history has seen such cases. Bank A went bankrupt due to failed investments, and Bank B refused to pay all depositors, citing that bankruptcy wasn’t covered in the agreement. Ultimately, the lawsuits fizzled out, and Bank A’s major shareholders served two years in prison.
Of course, they successfully and legally took away a lot of depositors’ money.
The banking system in the Gafura Empire is not much different from that of the Federation. After all, many of the Federation’s rules are "borrowed" from the Gafura Empire.
Later, these rules gradually evolved into federally distinctive new ones during societal development, but generally speaking, they share the same roots.
In Gafura, the largest bank is the Imperial Royal Bank, backed by the Imperial Family, with the treasury’s money stored there, giving the Royal Bank the utmost confidence; their deposit reserve requirement is much less than people imagine.
What happens when the bank’s reserve is exhausted?
When there is no money to pay other depositors, the bank faces tremendous danger, even potential bankruptcy.
In such a situation, borrowers certainly won’t hurry to repay, but instead, drag it out until the bank collapses, then purchase their "debts" at a "cheap price."
For example, if one owes a bank one million, even without interest, immediate repayment means repaying a full one million.
Yet after the bank goes bankrupt and its assets are auctioned, they might buy their debt for thirty or fifty thousand, saving tens of thousands legally, so anyone with a sane mind knows what to do now.
Now, the bank run trend has revealed its power. Not needing the nobility to withdraw, even the commoners alone are overwhelming major banks.
The bank run information rapidly fermented; some TV stations immediately switched to live broadcasts, which led more unaware people to learn about the situation.
The banks are running out of money; people are lined up to withdraw money. If not going now, it might be too late!
The various interviewed people, whether angry, anxious, or hopeless, described their emotional changes to reporters; not only did they feel broken, but also those watching on television.
"The Minister of Finance is done for!" Lynch watched the long queue on TV. The situation had become entirely clear; he turned to his young devotee and asked, "What’s happening with the financial index at the exchange now?"
The youngest Count jubilantly ran to make a call and soon returned, saying, "Mr. Lynch, the index has started to drop, but the decrease is less than one percent..."
"No worries!" Lynch responded, then looked at others, "Once there’s a bank run, it invariably triggers a sell-off in the financial market."
"People will end their financial investment plans prematurely due to concerns about not being able to withdraw their money or cash being insufficient, especially large enterprises."
Lynch took out a cigarette, and the youngest Count immediately lit it for him with a lighter, staring admiringly at Lynch.
Although they were about the same age, he acted like a child, while Lynch was already influencing the struggle between the Prime Minister and the Minister of Finance in a different way.
Finding a parental figure in peers leaves the deepest impact on young people, breeding blind admiration.
Lynch expressed thanks, letting his gaze linger on the young Count’s face for a moment, making the Count slightly shy.
Suppressing the shiver, Lynch shifted his gaze, "Previously, the Minister of Finance forced listed companies, through various means, to buyback circulating shares to boost stock prices and stabilize the market."
"This unintentionally resulted in these large companies having significantly reduced liquid funds."
"As a merchant owning multiple companies, I clearly understand that merchants manage liquid funds very strictly."
"By ’strict,’ I mean ensuring every penny is used without affecting operations or facing unexpected situations, not necessarily retaining more liquid funds."
"This implies stock repurchases outside plans have brought their cash close to the warning line, coupled with the bank run frenzy, making it even more impossible to withdraw any large sums now. To manage risks, the best way is to sell stocks."
"The stocks they bought over these days now have to be released, and they must sell even more stocks to cope with any financial crisis that might arise!"
Lynch said a lot in one breath, and the nobles present listened with great focus, regardless of whether they could comprehend or were just pretending; they at least appeared to understand.
If someone with a good memory noticed, they might find that the number of questions dwindles as time passes.
It wasn’t because they all understood Lynch’s ideas, but rather due to their capacity limits in these areas — Lynch was the expert, not them.
He paused briefly, sipping some coffee and nibbling on a sweet little pastry, before continuing, "In response to the bank run, banks will surely tighten cash flow, possibly urging loan repayments."
"You should know many companies operate with negative assets; if banks are to avoid problems arising from insolvency or bankruptcy due to a bank run, their best option is to reclaim money."
"This foretells major funding issues for some companies. Should the bank reclaim all their funds, these enterprises wouldn’t last until the next payday before going bankrupt!"
"Now, how long till the next payday..." Lynch glanced at the others.
This question wasn’t hard, and the nobles’ faces immediately lit up with a deep sense of engagement, with many vying to respond, "Only one week left!"
Lynch nodded, which made every noble who answered the question feel deeply gratified, not merely for participating in the whole process and interacting with Lynch but mainly for answering this crucial question correctly.
Engagement in a task spark strange feelings, an inexplicable emotion.
Lynch exhaled slowly, "This contest will soon reach its conclusion, and soon it’s time for us to seek benefits."
"The Minister of Finance will step down, His majesty will enter the field, and each of us will become more valuable!"
