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

Chapter 740 Zhang Dongwen's Worries and Fang Qingye's Vigilance

"Liu Shuai, are you home yet?"

"On the way."

"Are you alright today?"

"It's okay. I can't compete with anything else, but drinking is a piece of cake."

"What's the deal with that 'draft for comments' you mentioned?" Fang Qingye asked, getting to the point.

“Go back and take a look at the content. This is the key area of ​​supervision for banking regulators recently and in the future. Off-balance-sheet businesses such as financial derivatives trading, securities underwriting commitments, asset management plans, and private banking client trading have developed too much in recent years, leading to the emergence of shadow banking and the accumulation of a lot of risks. Therefore, the country is determined to rectify this and make an example of a few typical cases to warn others.”

"Of course I know you're cautious, and I don't think your Jinghai Bank will have too many problems in this regard," Liu Shuai concluded.

"But we still need to be careful, Liu Shuai. Let me know as soon as you have any news."

"Do not worry."

After hanging up the phone, Fang Qingye looked at the neon lights outside the window, still thinking about this question.

2016 was a very special year for China's financial industry, as it transitioned from "wild growth" to "strict regulation".

This year saw a series of major bill fraud cases, with internal control loopholes shocking the market, such as the 39 billion yuan bill fraud case at the Yanjing branch of the Agricultural Bank of China and the nearly 10 billion yuan bill fraud case at the Lanzhou branch of CITIC Bank.

Similarly, the sharp drop in the bond market and the "fake seal scandal" triggered credit risks in the industry. Guohai Securities was involved in a "fake seal scandal" in which its employees forged the company seal and conducted bond holding transactions with other institutions in the company's name. They later suffered losses and refused to admit it.

These events, which have already occurred or are about to occur, have forced regulators to make a firm decision and launch a rectification storm aimed at preventing systemic financial risks, and the "Guidelines for Risk Management of Off-Balance Sheet Business of Commercial Banks (Revised Draft for Comments)" is a sign of this.

We need to have a proper meeting and discuss this when we get back.

On Monday morning, as soon as Fang Qingye arrived at the office, she asked her secretary, Hu Lingling, "Has our bank received the 'Guidelines for Risk Management of Off-Balance Sheet Business of Commercial Banks (Revised Draft for Comments)'?"

"Received it, I'll find it for you right away," Hu Lingling replied, then rummaged through a stack of documents in the filing cabinet and handed it over.

Fang Qingye took the document and glanced at the date of receipt, April 20th. Her brows immediately furrowed: "It's been almost half a month, why are you only giving it to me now?"

Hu Lingling explained in a low voice, "You were on leave a while ago, and there were a lot of documents being delivered around that time, so this one got buried at the bottom..."

"From now on, you must remind me of these important documents immediately!" Fang Qingye said seriously, then asked, "Have Deng Xing and the others seen them?"

"They have all been circulated and copies have been distributed to each branch."

“Okay,” Fang Qingye said decisively, “The morning’s bank president’s meeting will be postponed by two hours. I need to look at this document first, and we will discuss it at the meeting.”

"Okay, I'll let them know right away."

Hu Lingling left in a hurry. Fang Qingye then picked up her teacup, took a deep breath, and began to read attentively.

Actually, it doesn't matter when the bank president's meeting is held for Zhao Wenjun and Deng Hui, since they are just working at the bank. It's just tough on Chen Danlu, who rushed back from Shanghai last night.

Although he has his own office at the bank headquarters, he rarely stays there. He originally planned to rush back to Shanghai after the meeting and wanted to go back in the morning, but the delay meant he couldn't make it back in the morning.

"Hu Lingling, Fang Xing said he wants to discuss (the revised draft for comments)?" Chen Danlu asked.

"Yes, he's looking at it right now. It's my fault for not showing it to Fang Xing in time," Hu Lingling said, feeling somewhat guilty.

"Oh," Chen Danlu was not thinking about Hu Lingling's dereliction of duty, but rather that Fang Qingye's eagerness to read the document indicated its importance.

Regarding off-balance-sheet business, the two branches in Shanghai conducted the most, and now both branches are under his supervision!

"Hu Lingling, find me a photocopy, I need to take another look," Chen Danlu said.

"Okay, wait a moment."

Soon, Hu Lingling brought a photocopy from the archives and handed it to Chen Danlu, who carefully examined it in his office. While Fang Qingye was looking at the draft opinion issued by the China Banking Regulatory Commission, Zhang Dongwen was also reviewing the document in her office at Goldman Sachs China headquarters in Lujiazui. Copies of the draft opinion had already been distributed to the financial investment department, and as a financial analyst, she naturally had to read it carefully.

But the more he looked at it, the more uneasy he felt. Finally, he couldn't help but take the documents out of the office and knock on the door of Lin Wei, Vice President and Head of Investment Finance at Goldman Sachs China.

Lin Wei was in her thirties, wearing a light gray silk crepe de chine suit. Her hair was styled in a high bun at the back of her head, making her look particularly refined. When she saw Zhang Dongwen come in, she smiled slightly.

"Dongwen, is something the matter?"

“I’ve read this (revised draft for comments),” Zhang Dongwen handed over the documents. “I feel that the wealth management product we’re working on with Jinghai Bank doesn’t seem to meet the requirements.”

Lin Wei looked at the other person: "You've read the product contract, tell me, which clause violates this 'Draft Opinion'?!"

“Mr. Lin, I wasn’t referring to the investment product itself,” Zhang Dongwen quickly explained. “I was talking about the financial structure behind it.”

Lin Wei's face immediately turned gloomy.

"That agreement was signed between Goldman Sachs China and D.E. Shao Group. What does it have to do with Jinghai Bank?!"

"But."

Zhang Dongwen was about to defend herself when Lin Wei interrupted her: "Dongwen, go do your work!"

After saying that, Lin Wei's tone softened a bit: "Dongwen, don't overthink it! The financial structure you designed is so complex that even I am amazed. Besides, Jinghai Bank doesn't have any information on it. How would they know about this? Even if they did know about it, they wouldn't understand what you designed. Don't worry."

"Alright then," Zhang Dongwen said, and left.

Back at her workstation, Zhang Dongwen was still somewhat uneasy, feeling that something big was about to happen.

In Nanxin, the bank president's meeting has already begun.

"I just had Hu Lingling inform everyone that the focus of this bank president's meeting is to discuss this draft for comments." Fang Qingye sat at the oval conference table, her expression serious. "According to my information, the government will soon be cleaning up and rectifying off-balance-sheet business, and it will be based on the contents of this document!"

Fang Qingye picked up the document and said, "I just read it carefully. The requirements for off-balance-sheet business are very strict. So I would like to ask everyone to tell me whether our Jinghai Bank's off-balance-sheet business has violated the terms listed therein. If so, how do we make changes?"

After Fang Qingye finished speaking, Deng Rong and Zhao Wenjun both looked at Chen Danlu.

Chen Danlu understood what everyone meant, so he said, "I have also read this document carefully. As far as I know, it seems that no one in our industry has violated the terms in the document. Of course, my understanding is not comprehensive."

After he finished speaking, he quickly added, "I suggest setting up a special team to conduct a thorough inspection and cleanup of all on-balance-sheet business operations within the bank. I will be in charge of this matter."

Chen Danlu took the initiative to assume responsibility, as it was something he was supposed to be in charge of anyway.

Unexpectedly, Fang Qingye shook her head: "I'll take charge. Chen Xing, you'll be my deputy. We must take this matter very seriously. There can be absolutely no mistakes in off-balance-sheet business!"

The top leader personally took charge!

The three vice presidents were somewhat surprised, not because they didn't trust Chen Danlu, but because it showed how much Fang Qingye valued this work.

The meeting clarified the key aspects and precautions for this investigation and selected key personnel and business leaders from departments such as the Interbank Department, Investment Finance Department, and Risk Control Department to form a special task force. Fang Qingye was appointed as the team leader, and Chen Danlu as the deputy team leader.

Jinghai Bank will conduct a comprehensive investigation into its on-balance-sheet business. The relevant inspection requirements have been officially issued to all branches and relevant business departments via official documents, and a copy has been simultaneously submitted to the Municipal Banking Regulatory Bureau.

The inspectors were divided into two groups and went to various branches to conduct on-site inspections, review files and audit reports. All tasks were carried out in a tense but orderly manner.

The focus of this inspection was two branches in Shanghai.

During the investigation, each team was required to compile a daily report outlining their work and any issues discovered, and submit it to the task force leader for review. Team leader Fang Qingye meticulously reviewed each report, and soon, a report on the "Jinghai Anying Series" wealth management products submitted by the Huangpu branch of the Shanghai branch caught his attention.

The "Jinghai Anying Series" wealth management products are non-principal-protected floating-rate, fixed-term wealth management products launched by Jinghai Bank, targeting corporate and high-net-worth private clients.

And the intermediary guarantor for this product is Goldman Sachs China!

(End of this chapter)