Manhattan Reborn 1978

new York.

It's approaching evening~

Manhattan, top floor of the Blue Crystal Hotel.

David led Carnes, George Sassoon and Professor John Nash, and with the help of the hotel waiter, they entered the room of their "bad friend" Giles.

After everyone was seated, David picked up the phone and contacted Mr. Gardener of the Gold Coin Hotel. He learned that he only needed to wait about another quarter of an hour to get the much-needed data report, and he thanked him with some emotion.

After hearing the content of his call, Carnes finally put down the game theory book he had been studying for half an afternoon, rubbed his eyes and asked David.

"What do you want this data for?"

David shook his head and smiled mysteriously, "If we put them somewhere else, they would have little effect."

“But in my hands, they can provide strong support for my theory from the perspective of data analysis!”

"Oh..." Kanes thought about it and said with a hint of confusion and expectation in his eyes.

"So you want to use them to report your ideas to Professor Bartlet..."

"That's right!"

David looked down at his watch, walked to Professor Nash and whispered a few words to him, then turned and walked out of the room.

. . .

About half an hour later.

At the door of the room, David finally met Professor Bartlet who had rushed back from Boston, his two "bad friends" Giles and Bloomer, and Pine who had rushed back from get off work early at the company.

After everyone greeted each other through the introduction of David, the "middleman", Giles and Bloomer impatiently grabbed David from both sides, brought him all the way into the bedroom, and began the "cordial greeting" between good friends who had not seen each other for a long time.

As half the owner of this place, Pine invited everyone to sit down, but he was oblivious to the sound coming from the bedroom. Instead, he asked Professor Bartlett about the details of the postoperative reexamination.

Professor Bartlett was in good spirits. He told the others about his review process with a smile, and also joked about the doctors' performance.

Pine was deeply moved to see that this old man, who was over 70 years old and had undergone a major heart surgery, was able to recover to his current normal state in just a few months, and he said this.

"You must follow the doctor's orders this time. You can't..."

"Hahaha~ all right!" Professor Bartlet smiled and covered his ears with his hands, his expression full of disgust.

Professor John Nash, Carnes and George Sassoon could not help laughing when they saw Professor Bartlet doing such a "childish" thing.

Amid the laughter of several people, a knock on the door interrupted the increasingly relaxed atmosphere in the living room.

Pine walked to the door and opened it, and found that it was the waiter who brought in two oversized file bags. He asked in surprise.

"Is this... what David asked you to prepare?"

"No~ He asked someone to deliver it just now."

"Oh." Pine took the file bag and returned to his seat. Professor Bartlet glanced at the file bag that Pine placed on the table, turned to look at Professor John Nash, and took the initiative to chat with him.

Kanes crossed his legs and listened to the sound coming from the bedroom getting smaller and smaller, and suddenly he felt a little envious and jealous.

About ten more minutes passed.

Giles, Bloomer and David, the three of them, walked out of the bedroom like "conjoined twins" and sat on the carpet in the living room to rest.

David saw the file bag on the table, opened it and smiled, "This is the statistical data I spent more than three months compiling. Let's take a look together."

"Oh? What are these statistics?" Pine, who knew nothing about this, took the file bag from David and asked.

"The one you opened is the statistics of asset liquidity ratio, liquidity conversion ratio and balance sheet changes of major international banks in the United States, Japan, the United Kingdom and Hong Kong in the past three years."

After David finished speaking, he raised the file bag in his hand to the others: "Inside this is the statistics of the business development scope and capital scale of the non-bank financial systems in many countries in the past five years..."

"Each of their pages is worth more than one hundred Mi Yuan..."

"I brought them here to ask for your help in testing their gold content."

Professor Bartlett looked at the file David had opened, raised his eyebrows and asked, "The non-bank financial system you mentioned is the Shadow Banks you mentioned before?"

"Yes!"

David picked out several documents that had been categorized and organized in the file bag, distributed them to several people, and then explained.

"According to my understanding, any financial intermediary in the United States that engages in maturity, credit, liquidity and other transformation activities and is explicitly backed by central bank liquidity and public sector credit guarantees can be called shadow banking."

"However, due to the different economic systems of different countries, the interpretation of shadow banking will also be different."

"But the definition of shadow banking generally refers to any lending relationship and off-balance sheet banking business."

“Domestic shadow banking includes non-bank financial institutions such as investment banks, real estate investment trusts, hedge funds, money market funds, bond investment funds, and insurance companies.”

"In addition, there are various financial intermediaries, small personal loan companies, underground banks, pawnshops, etc. that are difficult to collect data on, all of which are part of the shadow banking circulation system."

"Their characteristics and fundamental problems are systematic unclear property rights + unclear capital flows + difficulty in effective supervision + extremely large amounts of capital."

David held up a statistical data in his hand: "According to the current scope of shadow banking activities in various countries, I have roughly divided them into four main business types~"

“First, maturity transformation refers to the act of obtaining short-term funds through absorbing investments and then investing in assets with longer maturities.”

“Second, liquidity conversion refers to using cash-like liabilities to purchase assets such as loans.”

“Third, leverage refers to the use of borrowing and other means to purchase fixed assets and magnify the potential returns of investment.”

“Fourth, credit risk transfer refers to the assumption of the risk of the borrower’s commission and transferring it from the originator of the loan to another party.”

David handed the document in his hand to Giles, then held up another document and said to his mentor, Professor Bartlet.

"Among the countries and regions with the most active shadow banking activities in the world, the United States, the United Kingdom, the island nation, and Hong Kong rank first, second, fifth, and eleventh respectively."

"I deliberately ranked the British and Hong Kong colonies separately, mainly because of the particularity of Hong Kong's legal system."

Professor Bartlett smiled and nodded, taking the document from David: "According to your interpretation of shadow banking, it has existed for a long time."

"Yes."

David handed the last document to Blumer beside him, shook his head and sighed, "As my experience gradually enriches, I can better understand how astonishing the amount of funds flowing within the shadow banking system is."