The debt review of France's large and medium-sized banks lasted until late September.
Three days after Achille Fuld concluded his review, a report appeared on Jérôme Bonaparte's desk.
The content of the report is Achill Fuld’s assessment of the debt situation of large and medium-sized banks in France that exceeds tens of millions in the past month.
In a report, Achille Fuld ranked the debt situation of these dozens of banks from high to low. Among them, the one with the most serious debt situation is Insac Perel's Industrie de Paris.
For such a bank with a market capitalization of over 100 million, the debt it carries is actually 2.5 times the size of the entire bank.
Although the debt of 2.5 times is far from the nearly 10 times in history, it is still a big hole.
Once it is exposed by someone with serious intentions, Industrial Bank may not be able to survive until the next day and will be in trouble.
Looking at the amount of debt in the report, Jérôme Bonaparte could not help but frown and muttered softly: "Let me see, where did they spend all the money?"
Jérôme Bonaparte then read on. In the report given to him by Achille Fuld, it was clearly pointed out that the vast majority of the debts of the Industrial Bank were used for investment, and the objects of their investment were the ones he opened.
Subsidiaries and foreign high return bonds/equities.
Among them, the companies established by the Industrial Bank include Paris Public Transport Company, Paris Water Company, Lyon Public Transport Company, Paris Real Estate Company... They are spread throughout France and have become an important part of France's real industry.
"No wonder!" Jérôme Bonaparte muttered again in a low voice.
Judging from the types of companies that Yinsak Perel invests in, most of them are companies that focus on long-term operations.
Take the Paris Water Company, for example. Even if Insac Perel was authorized by Jérôme Bonaparte to monopolize the entire Paris water supply, Insac Perel would dare to raise the price!
They simply don't dare! If the price of tap water is too outrageous, not to mention the unwillingness of the Paris citizens, even Jérôme Bonaparte will order Insac Perel to adjust the water price to an appropriate level as soon as possible.
Therefore, the rate at which the Paris Water Company makes money is far less than that of financial speculation... Needless to say, the daily 5% or 6% return cannot be achieved even if it is higher than the 4% annual French government bond return.
As for the real estate company that was supposed to be a tool for attracting money, due to Baron Haussmann's continuous house building plan, its ability to attract money has not reached the expected level.
To make matters worse, Industrie de Paris was not founded on a traditional business model.
If France had a traditional business model, Issac Perel would not have been able to build a large bank comparable to Rothschild Bank in a few years.
The establishment of Rothschild Bank relies on the efforts of three generations of the Rothschild family, and they also encountered a good opportunity, and the bank was just established.
The establishment of the Industrial Bank of Paris relies on the aristocrats’ alignment and the promise of returns higher than 4% of France’s national debt to absorb the capital of retail investors to make it bigger and stronger.
In this way, the bank itself had a speculative nature when it was first established. Therefore, when the Industrial Bank was unable to earn the promised profits domestically, it turned its attention to foreign countries.
The Industrial Bank not only holds the railroad bonds of the Kingdom of Prussia, the Kingdom of Sardinia, and the United States of America, but also the treasury bonds of the Austrian Empire and the Ottoman Empire... These various debts are the reason why the Industrial Bank's debt is so high.
This is equivalent to France lending money to the Industrial Bank, and the Industrial Bank lending the money to foreign countries.
People who invest in Industrial Bank get bonds and stocks of Industrial Bank, and Industrial Bank gets debts and bonds of other countries.
Over time, the debt of Industrial Bank has become higher and higher.
At the end of Industrial Bank, Achille Fuld specifically wrote down the current situation of Industrial Bank and his own evaluation of them.
Up to now, Industrial Bank is still widely sought after in the securities trading market.
Not only have their values not decreased, but they have become higher and higher.
Because Industrial Bank uses the funds obtained from the stocks they issue to exchange for the stocks of other companies, and the stocks of Industrial Bank are only guaranteed by the securities of other companies it holds, while the stocks of various companies are guaranteed by their own properties.
The value is guaranteed.
The same real property thus generates twice as much fictitious capital: one in the form of shares in the enterprise and one in the form of shares in the industrial bank that allocated money to the enterprise and bought its shares.
However, Achille Fuld believes that this behavior of Industrial Bank is equivalent to walking a tightrope.
Once overseas investments are damaged, the entire company will immediately fall into crisis.
Because the profits earned by industrial banks from domestic investments are far from being able to pay for their original commitments, sooner or later they will be in crisis due to capital chain problems.
After reading the entire report of Achille Fuld, Jérôme Bonaparte realized that Alphonse Rothschild’s original reminder was not groundless.
If it weren't for Achille Fuld's report, Jérôme Bonaparte would have thought that Alphonse Rothschild was just as cautious as his old father.
So Jérôme Bonaparte called Basilio over again and asked him to send someone to invite Insac Perel immediately.
"Yes!" Basilio followed Jerome Bonaparte's order and started to act.
About an hour later, Basilio appeared in front of Jerome Bonaparte again, and behind him was Insac Perel.
"Your Majesty!" Insac Perel, wearing a black coat, said respectfully to Jérôme Bonaparte!
"Perel, sit down!" Jérôme Bonaparte pointed to the sofa beside him and said to Insac Perel.
Insac Perel obeyed Jerome Bonaparte's order and sat down. Then Jerome Bonaparte looked at Basilio again and said: "Basilio, you can leave now.
Yes! I want to have a chat with Mr. Yinsak alone!"
Basilio bowed to Jerome Bonaparte and then closed the door.
Only Jérôme Bonaparte and Insac Perel were left in the room. After the two were silent for a moment, Jérôme Bonaparte crossed his arms and tried to speak to Insac in an easy-going tone.
Perel said: "Yinsak, you must be very clear about the purpose of calling you here!"
As soon as these words came out of his mouth, Jerome Bonaparte felt a little regretful, because he found that these words obviously meant interrogation rather than discussion.
"Your Majesty, I know!" Insac Perel responded to Jérôme Bonaparte in a calm tone.
When Insac Perel accepted Achille Fuld's debt investigation, he already knew that he was likely to be raped by Gerard after Achille Fuld reported the bank debt to the emperor.
Emperor M. Bonaparte called over.
"I have looked at the debt situation of Industrial Bank. Although your situation is not too serious,
But it is also somewhat dangerous. What are you going to use to repay a debt that is 2.5 times higher than the market value?" Jérôme Bonaparte asked Insac Perel.
"Your Majesty, Industrial Bank has many investments overseas, and the current profitability of these investments must be very good!
We are fully confident that we will repay these debts!" Insac Perel responded firmly to Jérôme Bonaparte.
At this time, he has to show a firm attitude.
"What should you do if there is an economic crisis?" Jérôme Bonaparte continued to ask.
"Your Majesty, we still have some real industries in our hands and are fully capable of dealing with these risks!" Insac Perel said to Jérôme Bonaparte.
Jérôme Bonaparte suddenly remembered that the Industrial Bank did hoard some land.
Although the price increase of these lands is not as high as in history, it is destined to be higher than when Insac Perel acquired it.
As long as Yinsak Perel resells the land in his hands, the money he earns only needs to be paid in dividends.
Then Insac Perel's Industrial Bank can continue to exist.
Ultimately, a large part of whether a bank can survive depends on how much confidence the market has in the bank.
Insac Perel sold land in exchange for money, which is equivalent to telling the market that they have the ability to cope with the situation.
As long as the feedback given by the market does not collapse, then Industrial Bank can continue to survive.
The economic crisis does not exist forever. As long as the Industrial Bank can survive it, it will win.
Just like the Bank of France in 1848, they don't need to be richer than other banks, they just need to be able to outlast other banks.
"This is indeed a method!" Jérôme Bonaparte nodded and acknowledged Yinsac Perel's method, and then said to Yinsac Perel: "However, you should know that this method can only be used when
It will only be useful if your debts do not greatly exceed your assets on hand!
Once the debt of Industrial Bank greatly exceeds the assets in your hands, your behavior of selling off assets will only be regarded as the final madness!
By that time, the entire Industrial Bank will probably be frantically run!
This leads to bankruptcy!"
"Your Majesty, I will definitely follow your teachings!" Insac Perel responded to Jérôme Bonaparte.
"By the way, you should prepare in advance that the economic crisis is coming! Some businesses are shrinking when they should be shrinking. Now they are reluctant to shrink. If they want to shrink in the future, they will have no choice!" Jérôme Bonaparte warned Yin again.
A word from Sac Perel.
Insac Perel told Jérôme Bonaparte that the Industrial Bank had begun selling foreign bonds to the outside world to cash out.