No matter how optimistic anyone is, they have to admit that the secondary market is finished.
And this is just the storm caused by Leiman's bankruptcy in the secondary market. The bigger problem lies in the outside world.
Leiman, one of the world's top investment banks, has countless businesses around the world.
Once such a global investment bank files for bankruptcy, it will have a certain impact on the international financial situation.
In the eyes of the media, the bankruptcy of Leiman Investment Bank can be entirely attributed to Li Jin alone.
"A Chinese, a Chinese who appeared on the cover of Time Magazine, personally overthrew the Leiman Empire and made Americans understand that they are not the only ones who can play modern finance."
"Leiman filed for bankruptcy. This century-old company went through ups and downs and eventually fell into the subprime mortgage crisis."
"A deep analysis of the nature of this subprime mortgage crisis from the bankruptcy of Lei Man, what it revealed to us, and what it told us. The lessons learned are something that every country and economic organization in the world must learn deeply."
"The climax of the subprime mortgage crisis has arrived. Leiman has fallen. Who will fall next?"
News media are afraid of chaos and use various eye-catching ways to headline news, but no matter which media they are, the core of their content points to one thing.
The Lei Man is over, what will happen next?
However, the market quickly answered this question.
Leiman Investment Bank filed for bankruptcy, and a total of 23 small and medium-sized banks across the United States jointly declared bankruptcy.
Almost all of these small and medium-sized banks have obtained insurance contracts from Leiman Investment Bank.
The bankruptcy process of a company is very troublesome, let alone a large financial investment bank like Leiman Investment Bank.
Once it enters bankruptcy proceedings, the assets will be liquidated immediately. After the asset liquidation, the debts and assets will be divested, and the court with jurisdiction will appoint a bankruptcy liquidation executor for the company.
But no matter what, even if the company goes bankrupt, some previous debts still need to be paid off.
Therefore, these small and medium-sized banks began to go bankrupt in a concentrated manner in order to meet the requirements and apply for compensation from Leiman.
However, the biggest problem is that these small and medium-sized banks have formed a chain of bankruptcies. What will the public think when they see it?
The bank has gone bankrupt, what should I do with the money I have in the bank?
As a result, distrust of banks began to become rampant across the federal United States, and many people lined up in front of banks, wanting to withdraw their savings.
Banks rely on depositors' deposits to invest and make profits. Once a run occurs, people will take the money away. If the bank has no money, it will be a waste.
No one expected that Leiman's bankruptcy would have such a big impact.
This directly caused all banks in the United States to fall into huge pressure to repay their savings deposits.
In response to this, the Federal Reserve and the Central Bank finally couldn't sit still.
The first decision the Federal Reserve made was to raise savings interest rates, and then to reduce the proportion of deposit reserves that commercial banks in various regions need to pay to the central bank.
In order to ensure the safety of savings, all banks have to pay money to the central bank according to the amount of savings they have. This money is used to ensure that they can at least cope with large-scale withdrawals from savings customers.
The first of these two measures taken by the central bank is to allow savings customers to reduce the proportion of money withdrawals. After all, interest rates have increased, and you can get more interest by depositing money in the bank.
The second method is to relieve the pressure on banks.
But at this time, the secondary market continued to collapse, causing the chain problem of overdue personal credit to further erupt.
On the one hand, banks have to face savings customers taking money away from the bank; on the other hand, all the money loaned by banks is overdue and cannot be recovered.
So...the U.S. banking industry exploded.
The subprime mortgage crisis finally began to cross borders, from the financial world to the banking industry.