I'm in the county town, and you say I'm a big shot?

Chapter 653, 652: "Let's earn some stable money, so everyone can sleep more peacefully."

The forum's formal meetings lasted two days, with a closed-door roundtable discussion on the morning of May 30th to discuss shadow banking and the regulation of cross-border capital flows. Only some invited representatives participated, and Fang Qingye was not invited.

In the afternoon, there will be a plenary session where the Shanghai Financial Office will release information on the progress of financial reforms in the Free Trade Zone, followed by a closing speech, which Fang Qingye will attend.

With nothing much to do in the morning, and Bai Ou being in Nanxin, Fang Qingye went to the Pudong branch to listen to their concerns about setting up a branch in Huangpu.

In accordance with the spirit of the bank president's meeting, Jinghai Bank will establish its second branch in Shanghai, located in Huangpu District, with Chen Danlu in charge of the preparations.

After listening to the report, Vice President Gao Pan said, "President Fang, I saw Jing Xiandong from Ant Financial introducing Ant Financial online. Their financial innovation is truly impressive."

"Oh, you're very insightful?" Fang Qingye looked at the other person.

"Yes, Jinghai Bank doesn't yet have the technological strength of Ant Financial, but we can learn from their core financial business model!"

"Are you talking about syndicated loans or ABS asset securitization?" Fang Qingye asked, glancing at the loan.

"ABS asset securitization! We've calculated that if we implement this business, not to mention other things like mortgage loans being ABS-based to realize long-term mortgage assets, we can also use a 3x leverage to earn our bank nearly 8 million yuan in profit a year! If we increase the leverage ratio, the profit will double!" Gao Pan said excitedly.

Fang Qingye didn't answer directly, but looked at Chen Danlu and asked, "You think so too?"

“I also think it’s feasible. As long as I strictly control the leverage ratio, the risk is manageable,” Chen Danlu said.

"Then let me ask you, can you strictly control the leverage ratio?!"

“Well…” Gao Pan chuckled, “The Basel Accords stipulate that keeping it at 10 times is acceptable.”

Fang Qingye shook her head after hearing this.

"ABS is like drugs; it's addictive! Don't think Ant Financial is only using 3x leverage now; I dare say they'll be using 10x, 100x, or even more in the future!"

"Then they'll be in trouble! That's why I said we're absolutely not touching this, so don't even think about getting involved in ABS."

The group looked at each other, but said nothing.

Everyone knows that Fang Qingye is now a man of his word; if he says no, then no.

"Let's earn some stable money, so everyone can sleep more soundly," Fang Qingye said calmly.

The attendees at the afternoon conference appeared relaxed, unlike the tense atmosphere of the previous two days' break forums. During a break, Fang Qingye stood alone on the balcony at the end of the corridor, gazing at the cityscape outside.

Shanghai has entered the plum rain season, and today a light drizzle has been falling continuously, shrouding the entire city in mist and rain.

Fang Qingye heard footsteps, turned around and saw Director Luo.

"Coming out for some fresh air and a smoke won't bother you, will it?" Director Luo said with a smile.

"It's ok."

Director Luo took out a pack of "Huazi" cigarettes from his pocket, lit one, took a deep drag, and slowly exhaled smoke rings, a look of ecstasy on his face.

"Ah, that feels good."

Fang Qingye smiled and said nothing when she saw this.

"Hey, President Fang, what were your thoughts after listening to Mr. Jing's speech at Ant Financial yesterday afternoon?" Director Luo suddenly asked. "It was great. It painted a bright picture of a technology-driven inclusive finance future for us," Fang Qingye replied.

"Do you really think so?" Director Luo glanced at Fang Qingye.

Fang Qingye remained silent.

"Ant Financial was specifically discussed at this morning's closed-door roundtable meeting," Director Luo said.

Fang Qingye listened attentively and remained silent.

"The focus of the discussion was mainly on Ant Financial's core financial business model: syndicated lending and asset-backed securities (ABS)."

At this point, Director Luo suddenly changed the subject and said, "President Fang, why doesn't your Jinghai Bank engage in ABS business? As one of the pilot banks for internet banking, Jinghai Bank is capable of launching this business."

"By revitalizing existing assets, optimizing the balance sheet, and then leveraging, look how well Ant Financial is doing! They're using 3 times leverage now."

Fang Qingye listened, looked at the drizzle outside, and said lightly, "Jinghai Bank can indeed do ABS and leverage it to bring in considerable revenue. This morning when I went to the Pudong branch, the leaders there even suggested that we learn from Ant Financial and do the same thing."

So, are you planning to do it?

"No, I'm worried I won't be able to control my greed." Fang Qingye smiled slightly.
"Or I'm worried that I won't be able to control some of the people below who will become reckless and do things that can be 3 times today and 10 times or even 100 times tomorrow."

"Lending with a small amount of capital—packaging the loans into ABS and selling them to raise funds—lending again and securitizing them, repeating the cycle, doubling the leverage and doubling the returns, just like taking drugs and becoming addicted."

"Yes, it can be addictive." Director Luo took a drag of his cigarette, looking at the drizzling rain outside. "I'm worried that Jing Xiandong and his team will get addicted. What if Ant Financial becomes too powerful to handle in the future?!"

"What's there to be afraid of? We're a socialist country." Fang Qingye said, half-jokingly and half-seriously, "When the iron fist of socialism strikes, everything will be shattered to pieces!"

"Haha, you," Director Luo laughed after hearing this, "I don't want it to come to that."

Unfortunately, it still came to that point in the end.

Fang Qingye sighed inwardly.

"President Fang, I see you and President Ma have a pretty good relationship. Perhaps you could give him a gentle reminder when the time is right?" Director Luo suddenly said.

"Do you think Mr. Ma will listen to me?" Fang Qingye asked in return.

"That's not necessarily true. To be honest, I admire Mr. Ma quite a bit, and I really don't want Ant Financial to come to that point, as it would be a loss for Mr. Ma as well," Director Luo said.

"Alright then, let's see if there's such an opportunity," Fang Qingye agreed.

To be honest, Fang Qingye didn't want Ant Financial to suffer the same fate as in the past, where Ma Yun's image also collapsed.

"Oh dear, the meeting has started. Let's hurry in," Director Luo said, glancing at his watch.

The three-day Lujiazui Forum concluded successfully after completing its planned agenda. The forum was held at a crucial time for China's deepening financial reforms, and released a number of important policy signals, including the accelerated internationalization of the RMB, the two-way opening of the capital market, and interest rate liberalization. The technological power demonstrated by internet finance companies, represented by Ant Financial, has brought a huge shock to the traditional banking industry.

Fang Qingye left Shanghai for Hangzhou the next day to attend the Taiji Zen Garden Tea Party hosted by Ma Yun.

(End of this chapter)