Daming: Brother, there is no future for monks, let's rebel

Chapter 420 Bank Leverage
Shen Jin really couldn't figure out how to lend a sum of money to two people.

In his concept, the borrower provides collateral, and they hand over the money to the borrower, and then wait to collect interest.

Or, the borrower is unable to repay the debt due to various reasons.

Then, they will naturally confiscate the collateral.

But no matter what, the money has to be lent out. You can't even borrow the money and don't even give it to others, right?

If the person in front of him was not the King of England, Zhu Han, Shen Jin would even suspect that he wanted to use his power to seek the favor of the people.

Not only Shen Jin, but even Liu Shenhong looked like he had seen a ghost.

The thoughts of these two guys were almost written on their faces, and it was difficult for Zhu Han not to guess.

He glared at the two of them viciously: "What do you two bastards mean, this king is the kind of person who oppresses good people?"

Even if the two of them thought so in their hearts, they would never dare to admit it in front of Zhu Han, and shook their heads at the same time.

"Don't dare!"

"My lord, you are so wise and talented that you naturally disdain to do such a thing."

Zhu Han was very satisfied with the acquaintance of these two guys.

"Shen Jin, our Daming Bank has already started to absorb funds from depositors, right?"

"Yes, my lord, with the imperial court's endorsement, many people are willing to deposit their silver in our Daming Bank. At present, there are about 1000 million taels of silver in savings across the country." Speaking of business, Shen Jin put away his playful smile.

"According to your lord's order, we didn't use any of the money."

This is Zhu Han's order. The most feared thing about forming a bank is a run on it.Once depositors find that they cannot exchange real money, the bank's reputation will be destroyed in an instant.

In order to avoid this kind of thing from happening, Zhu Han has already explained that they only need to absorb savings and be familiar with all the processes of the bank's operation, and they don't need to make profits for the time being.

The money deposited in Daming Bank looks like a lot.

In fact, if the more than 1000 million taels of silver were distributed to the entire Ming Dynasty, it would be pitifully small.

After all, people who are really rich will not deposit their money in banks.

In today's banks, deposits require handling fees.

The more you save, the more fees you pay.Most of the cases where they use banks are for the foreign exchange business of certain banks.

And the ordinary people with the largest number, that is, after the founding of the Ming Dynasty, life was better than before.

It's not even possible to deposit the little money in my hand into the bank.

The current Daming Bank does not have interest on deposits, and those deposits do not need handling fees for the time being.

Zhu Han frowned and thought for a while, then tapped on the table lightly: "Although it's a bit unsatisfactory, the time is ripe now."

"Shen Jin, starting today. My Daming Bank officially accepts deposits from the whole of the Daming Huaxia region."

"As long as people deposit money in our Daming Bank, they can get three percent interest every year. You can open an account in our Daming Bank at least one penny."

Both Shen Jin and Liu Shenhong were taken aback. Could it be that the prince has a fever and is confused today?
Others deposit money in Daming Bank, and Daming Bank has to spend manpower and material resources to manage it, not to mention paying interest to the depositors.

"My lord, this is too... inappropriate?" Shen Jin almost said the word stupid.

Fortunately, at the critical moment, I changed my words in time.

"My lord, although the three per cent interest rate is not much, it will still attract many people. At that time, more and more people will come to our Daming Bank to make deposits."

Zhu Han nodded slightly: "That's right, this is the purpose of this king. This interest is to absorb deposits as much as possible."

……

The prince is really crazy, and Shen Jin is very worried.

Afraid that Zhu Han really didn't understand the key point, he hurriedly explained: "My lord, even if there is only two or three percent interest, if there are too many depositors, the interest will become an astronomical figure."

"Besides, the prince even accepts deposits of one penny. In this case, the cost of our operating officer will become very high."

"Although our loan interest rate is higher, but your lord also said before that the interest rate of our Daming Bank's loan is only a mere [-]%."

"My lord, although the risk of lending is relatively small. However, this does not mean that there is no risk."

"The purpose of our Daming Bank is to cover the entire mainland of Daming Huaxia. With such a large stall, the possibility of problems is too great."

"If we not only have to bear the operating costs every year, but also add bad debts, and losses due to various reasons..."

After a little hesitation, Shen Jin gritted his teeth and said, "Da Ming Bank is likely to lose money."

"The villain feels that it is almost impossible to hide the news of the bank's losses. When the time comes, those big households will definitely withdraw their deposits to avoid losses."

"As long as those big households start withdrawing money, people will definitely follow suit. Once this situation spreads, leading to a frenzy of bank runs all over the world, our Daming Bank will be completely finished."

Shen Jin didn't care whether Zhu Han would be angry or not, he had put too much effort into Daming Bank.

In any case, I don't want Daming Bank to be destroyed because of Zhu Han's "incompetence".

Zhu Han was a little surprised, this kid Shen Jin has a long-term vision, it seems that he seems to underestimate this kid a bit.

If he hadn't experienced the era of information explosion in later generations.

I'm afraid it's really not as good as this guy.

"What you said makes sense, but just like what the king said just now, why do you think that Daming Bank will suffer losses?"

"In this world, it is true that any business has risks, but this is definitely one of the businesses with the least risk."

Seeing that Zhu Han didn't seem to be joking, Shen Jin gradually calmed down.

This Daming Bank has grown from scratch, and it is indeed the idea of ​​His Royal Highness the King.

Shen Jin often finds it inconceivable why this His Royal Highness has so many wonderful ideas.

It stands to reason that it is impossible for someone who can think of such a thing as a bank not to know the risks involved. If he cares about it himself, he will be in a mess and dare to doubt His Highness the King of England.

"The villain really can't figure it out, so I ask the prince for advice."

Zhu Han said with a smile: "Do you know why this king, without hesitating to invest a huge amount of money, must open the Daming Bank in every state capital of our Daming?"

"My lord, I understand. If our Daming Bank spreads all over the place, it means that those merchants can make deposits and withdrawals anytime, anywhere, anywhere in Daming." Shen Jin replied decisively.

"Although those banks in the past also had these businesses. However, for some reason, those banks could only be limited to a certain place or a few places, which is not as convenient as our Daming Bank."

Shen Jin did not elaborate on the reasons.To put it bluntly, it is nothing more than a conflict of interests.

Zhu Han nodded slightly: "That's right, you can think of this, so it shows that you put your heart into it."

"Then let's assume another scenario. A businessman from Yingtian wants to do business in Yanjing. In the past, his money needed to be passed through two banks, but now he only needs to go through our Daming Bank."

"And the businessman from Yanjing happens to be going to Sichuan and Sichuan soon to do business, what will he do?"

"My lord, if I were the businessman, I would naturally deposit this money in the Daming Bank, and take it out when I arrive in Sichuan."

Zhu Han continued to ask: "What if this Sichuan-Shu businessman happens to be going to Yingtian to do business again?"

Shen Jin was thoughtful: "My lord, what you mean is that although this money has been circulated in our Daming, for us, this money has actually remained unchanged in Yingtian."

"For these merchants, this is three pieces of silver, but in our place, this amount of silver is actually enough."

"The banknotes you mentioned before are based on this principle."

Zhu Han shook his head: "Put aside the banknotes first, let's talk about depositing and withdrawing silver now."

"You are right about one thing. For those who save money, this is three pieces of silver. But in the process of operation, these three pieces of silver are only equivalent to one piece of silver. Do you understand now?"

Of course Shen Jin understood such a simple truth.The problem is, what His Royal Highness let him understand is obviously not such a straightforward thing.

The current money houses also operate in this way, which is not unusual.

At least, there is no need to specifically mention it.

Seeing Shen Jin's confused face, Zhu Han also realized that what he said seemed a little too profound.

He didn't realize that Shen Jin was incompetent.Not to mention the people of this era, even Zhu Han, a time traveler, was dumbfounded when he first learned how the bank works.

Smiling slightly, he patiently explained: "Didn't you realize that they didn't actually use silver during this process?"

Shen Jin's heart suddenly moved, and he vaguely seemed to have grasped some key.But when you think about it carefully, it seems that there is something separated by a layer, which you can't see or grasp.

He could only continue to stare at Zhu Han with pitiful eyes, hoping that Zhu Han could clear up his doubts.

He could even vaguely sense that what His Royal Highness was about to say next was absolutely extraordinary.

"Shen Jin, these merchants seem to be trading with silver. In fact, they didn't move a tael of silver at all. Therefore, these people are essentially using the reputation of our Daming Bank."

"If the vast majority of merchants in the country are using the deposit and exchange business of our Daming Bank, the silver they are really using is actually only a part, and most of it has been in our bank."

"Only in a few special cases, they will withdraw all the money."

"I'll take a businessman as an example. If he deposits 100 taels in the bank, before the merchant withdraws the silver, the biggest profit for the bank is to lend the money and charge interest before the merchant withdraws the money."

"And our Daming Bank..." A smile crept up the corner of Zhu Han's mouth.

Inexplicably, he felt the thrill of opening Pandora's box.

"If a businessman saves 100 taels, most of the time he will only use part of it, such as 20 taels. Then at this time, we can release 80 taels of it as a loan."

Zhu Han's statement seems to be no different from those banks that Shen Jin mentioned before.

But Shen Jin's eyes became more and more bright, his heartbeat was accelerating, and his mouth was dry.

He knew that the real point came.

Sure enough, Zhu Han said again: "Let's do the math, the borrower is also a businessman. He may have borrowed money because he is interested in some business and needs a sum of money temporarily."

"Then, he won't withdraw all the money, because the people who do business with him also have business in our Daming Bank. Therefore, most of the money here is still in our Daming Bank."

"Of the 80 taels, there are 20 taels that the merchant will use for other purposes. But there are 60 taels left, which we at Daming Bank can dispose of at will..."

hiss……

Shen Jin gasped, and his pupils shrank sharply.

Now, he could even clearly hear his own heartbeat as if beating a drum.Do not know when, sweat has soaked his clothes.

It turns out that this is what it means to lend a sum of money to two people.

Shen Jin even thought of more.

When His Royal Highness gave an example, he deducted a part of the money at the disposal of the depositors themselves.

But Shen Jin knew that in actual operation, there was no need for this at all.

Because when a sum of money goes out, more money will definitely come in.

As long as the bank can reserve a part of the funds, it doesn't matter how many people you want to lend the 100 taels of silver to.

No wonder, the prince wants to give interest to those who save money.

Because the more people deposit money in Daming Bank, the greater the room for manipulation.

Those who save a small amount of money are also extremely important to the bank.

Because these people are really saving money, and their money may not be moved for several years.

Even if the number of these people is small, it can't stand the large number of them.

Daming now has more than 2 million people. As long as each person saves one coin, it will be more than 2000 million taels.

With so many fixed silver reserves, there is no need to worry about thunder.

Seeing Shen Jin's appearance, Zhu Han knew that he understood what he meant.

Approvingly said: "This king calls this method called leverage."

Shen Jin swallowed hard. When Zhu Han set the loan interest rate of Daming Bank before, Shen Jin sighed that his prince was too kind.

One cent, that is, 10% interest.If it is allowed in later generations, it will definitely make people scold to death.

But in this era, it is the same as not paying interest.

A three-point profit is extremely conscientious.

Now Shen Jin understands, this shit is worse than usury.

Those black-hearted usurers, no matter how high the interest rate is set, he can only lend a sum of money to one person.

As for Daming Bank, for the same amount of money, as long as it is loaned out several times, the interest charged will be higher than usury.

Loan usury is immoral, and many people curse with blank eyes.

And they...

People who find Daming Bank to borrow money will be grateful to them instead.

"This... is simply... easier than stealing money..."

Shen Jin was already shocked and speechless.

As for Liu Shenhong, who had listened to this with him, he probably opened his mouth dumbly and remained motionless.

(End of this chapter)