Chapter 120: Hastiness!

Neither joining the Federal Reserve System for Federal Reserve oversight nor enrolling in the Federal Insurance Program for FDIC oversight. It seems that no one is supervising this third category of savings banks?

Actually, they're really not being supervised.

Theoretically, there are two levels of bank charter issuance, or so-called bank licenses, by the U.S. government.

Naturally, the first is the U.S. federal government, but before the enactment of the Interstate Banking and Branch Efficiency Act of 1994, the law did not allow for nationwide savings banks. So, in this category of banks, no one has run to the federal government to apply for a license.

Since federal government licenses are not available, can local licenses be obtained? The answer is yes, and it can even be said that bank licenses are issued by state governments for savings banks!

Bank charters issued by state governments naturally fall under state government supervision. On paper, it's reasonable and totally fine.

But in reality, state governments have nowhere near the budget of the federal government. With less money, they naturally can't afford to hire too many officials, which results in a severe shortage of staff at the state-level banking and financial institutions supervisory committees.

Moreover, due to highly localized characteristics, the interwoven relationships among bankers make the state-level supervision almost indistinguishable from having no supervision at all.

It may seem like these banks in this category are the best: nobody's watching, they can develop however they want—sounds great! However, the lack of strong regulatory oversight, while an advantage, is also a disadvantage!

Without the endorsement of a government regulatory unit, these banks are naturally weaker in terms of public credibility compared to the other two types of savings banks. They may be fine in the local market, where a family may have been operating for generations and has enough credibility. Whether or not they have federal government backing, people trust them and are willing to deposit money in their banks.

But when expanding, their shortcomings become apparent. To compete in the market, they need to build public trust from scratch, which is not something that can be accomplished quickly, even in a year or two.

Just from these characteristics alone, it seems that none of these three types of savings banks pose a threat to Carter's own Blake Bank. So why is Carter worried?

His gaze turns to the third type, the almost unregulated savings banks. Since these banks are almost unregulated, how much capital they really control and can call upon is simply unknown.

And their pattern of mergers and acquisitions is almost the same as that of commercial companies. If they are rejected after expressing their intention to acquire another bank's holders, such as the board of directors or sole proprietor, the situation escalates to the next stage: competition!

Not only is the acquisition model of this type of bank almost the same as that of commercial companies, even competition is copied verbatim. As long as local laws don't prohibit them from entering, they will open a branch in your area and offer high-interest deposits, low-interest loans, etc., to attract local residents' deposits.

Once they've squeezed enough of your market space, they'll come knocking: "Can we talk about acquisition now?"

Compared to the orderly mergers of the first two types, the acquisition method of these banks is simply unethical, lacking any sort of method! Without knowing how much capital they have, even a sum of $20 million is unable to provide Carter with any sense of security.

Or rather, it cannot provide enough security.

Because the unknown is scary!

Helping Jason or helping Alice ultimately comes down to helping the local citizens. In gaming terms, it's about raising goodwill! The higher the goodwill, the higher their loyalty and trust in their own bank. They won't easily be swayed by small gains and switch allegiances.

Of course, if the other party truly runs to offer interest-free loans or a 20% annual interest rate on deposits, then Carter has nothing to say. After all, who can refuse charity from a benefactor?

"Carter, thank you, thank you."

It's unknown how much goodwill Carter has gained from the citizens for now, but it's clear that Alice's goodwill is full. Alice, with her bright, watery eyes, awakened Carter with her excited and joyful gratitude.

"It's nothing, just a small favor."

The girl, well, the girl one year older than himself, with her sparkling eyes, made Carter feel a bit awkward. Although Carter was called by Lycoris, to be honest, in the arrangement and handling of the whole situation, Carter didn't seem to have really considered whether or not they could get their salaries back.

At this moment, Carter's mind was filled with thoughts of "decreasing residents' incomes," "the Great Depression is coming," and "mergers and anti-mergers." The nearby Lycoris suddenly lost interest.

Girls are precious, but money is more valuable! Carter, who is greedy and righteous, thought for a moment, then directly declined the lunch invitation from the two girls before "greedy" but after "righteous."

Hastily returning to the bank, Carter immediately began preparing the survey questionnaires to be distributed to the part-timers the next day with Goodman. The questionnaires focused on total household consumption, the proportion of spending on necessities, local store business conditions, changes in bank deposit and loan interest rates, and other items.

Each questionnaire only had very general quality evaluations like "excellent, good, fair, poor" for each item. Carter and Goodman understood that expecting these people to conduct detailed investigations and statistics was a pipe dream. Having some rough information as a reference was better than nothing.

Goodman was quite supportive of Carter's actions. As a native of Douglas, he was very supportive of seeing the "neighbors" living better. Even after completing the questionnaire, Goodman turned around and comforted Carter, telling him not to worry about the money:

"Douglas Bank's prosperity is tied to the prosperity of Douglas's citizens. Helping them get additional income allows them to survive. They can continue to work and create value. And this money, whether spent in supermarkets, grocery stores, or anywhere else, most of it will eventually flow back to our Blake Bank!"

Whether or not it flows back to Blake Bank, Carter doesn't care much. Because as soon as the two finished their work, Julian's call came in. The content of the call was very simple, just one sentence, two words:

"Gold, sold out!"

Finally, as if Julian was deeply afraid that Carter wouldn't be stimulated enough, he added:

"An average profit of $184 per ounce! You're going to be rich! Filthy rich!"

At first, when he heard the average profit per unit was $184, Carter didn't feel much. Habitually, he casually did some addition: 184 + 534 = 718. 718? 718?!

"Shit?! Didn't it rise by only $30 this morning? Why is it rising again?! No, no, how can it still rise?!"

After the exclamation, the second thought rushed into Carter's mind:

Damn it, haste makes waste! I should've invited Lycoris when I just got back.