CHAPTER 1560: CHAPTER 567: THE GREAT BANK CRASH

The era of regime change is always chaotic.

Douglas MacArthur’s resignation was just the beginning of the prelude to this chaos.

Herbert Hoover, with his last efforts, hoped to pull the United States’ economy back during his term, so that at least his own reputation would improve somewhat.

Franklin Roosevelt, on the other hand, believed that before March 4th next year, he was just an ordinary American citizen and had no reason to engage in presidential activities.

In reality, Donnie knew that Franklin Roosevelt merely thought the current administration under Herbert Hoover was completely lacking empathy and had already lost its reputation. Therefore, Franklin Roosevelt did not want to be associated with it in any way.

After the financial crisis, the banking industry in the United States faced a wave of successive collapses. Because of this, Herbert Hoover established the Reconstruction Finance Corporation (RFC) in the name of the White House.

Now, it seemed that the U.S. stock market had already calmed down.

Through the efforts of the Reconstruction Finance Corporation, the rate of bank closures in the United States had also slowed.

It seemed that before entering 1933, the U.S. economy began to normalize and progress in a positive direction.

In this context, Donnie called upon Robert and Café Jackson, who were in the midst of their handover work.

Robert was about to become the Secretary of the Treasury for the new U.S. administration.

Café Jackson would also be stepping down from his position as Postmaster General.

"Apart from the handover work you’re doing, the most important thing next is to stabilize the business of Breton Bank. Remember, I need the public to know.

No matter the circumstances, Breton Bank will always be the safest bank in the entire nation!

Their deposits in Breton Bank will not have any issues!"

Donnie said to the two with a serious expression.

These simple words changed both Robert and Café Jackson.

"Boss, do you think the wave of bank closures will continue, or even get worse?"

Café Jackson confirmed with Donnie.

Donnie nodded, saying, "That’s right, ever since the Reconstruction Finance Corporation was established, large-scale bank closures in the U.S. were already inevitable."

Both Robert and Café Jackson were quite surprised. It’s known that the reason they could curb the speed of bank closures was.

Because the Reconstruction Finance Corporation started providing loans to these banks.

Now, Donnie is saying this will trigger a new wave of large-scale bank closures in the U.S. banking industry?

"Any attempt to use administrative means to alter the market economy will not succeed, especially in a capitalist country!"

Donnie did not explain further to them.

As Donnie’s two strongest subordinates, Robert and Café Jackson executed Donnie’s orders uncompromisingly.

Even if they had doubts about it.

Thus, next, Breton Bank, one of the largest savings banks in the nation, began a series of dazzling operations.

First, Breton Bank announced that as a savings bank, their loans were only 35% of their deposits.

This was an extremely conservative figure, conservative enough that any savings bank would mock Breton Bank’s timidity upon seeing it.

A week later, Breton Bank announced again that their non-performing loan rate was only 0.78%.

If the previous figure was ridiculed by peer banks in the U.S., then this figure would make every peer enviously green.

It should be noted that after the financial crisis, the non-performing loan rate of all banks in the U.S. had reached 3%.

And that’s a conservative figure.

Now the non-performing loan rate of Breton Bank was only 0.78%.

What else could make them envious?

Another week later, Breton Bank announced another significant news that they would conduct credit ratings for their lending companies and individuals.

If the company’s or individual’s credit rating could not meet Breton Bank’s passing grade, Breton Bank would not provide any form of loan to them!

The banking industry in the U.S. had mixed reactions to this news.

Some people thought such a credit rating was necessary. After all, after the financial crisis, many people had no way to repay bank loans.

But they also couldn’t clearly know these individuals’ situations.

However, some thought this rating system was simply unrealistic. With nearly a hundred million people in the U.S., how could it be possible to clearly know each individual’s credit status?

Surely, they couldn’t ask every person heading to Breton Bank for a loan to have Breton Bank staff search a vast ocean of names for theirs?

Yet a small group of smart people sniffed out a different flavor in this.

They believed that Breton Bank’s intention wasn’t truly to conduct credit ratings for so-called companies and individuals.

Their real purpose was to establish an image in the minds of the American public.

An image of Breton Bank as strong and conservative.

A bank with such an image would gain more depositor trust.

They sought more deposits!

In fact, just as they suspected, when this information was announced, more and more ordinary American citizens trusted Breton Bank even more.

They withdrew their deposits from other banks and then put them into Breton Bank!

A week later, Breton Bank announced the most important news.