My Realistic Simulation Game

Chapter 234 The Storm Is Coming, and We Are Fully Prepared
Just as everyone predicted, Far Eastern International Bank became a hit!

Citizens, lured by promises of high interest rates and enticing gifts, lined up in a long, winding queue on the Ten Nations Bank Street, the line even spilling onto the next street, creating a spectacular scene.

Auto alliance stores, which belong to the same ecosystem as banks, are also booming!
With Berezovsky personally overseeing the operation, the inventory cars parked in the Volga factory square were driven away one by one. Thanks to that precious shopping voucher, more than 6,000 cars were sold in just a few days, and the funds recovered were like rivers flowing into the sea.

The Jeanswest store and the "Cherkizovo" market were also packed with people.

Depositors holding cash vouchers went on a shopping spree, causing a rapid increase in revenue across Far Eastern Group's various industries.

In this turbulent era of continuous ruble devaluation and widespread anxiety, the emergence of Far East Group and Qin Yuan seemed like a safe haven with precise value anchoring, and everything seemed to be perfectly timed.

The storm has shaken the client base far more than Williams and other bankers initially anticipated.

Their customers started doing the math in their heads.

What can you get besides the limited interest when you deposit money in UBS or Deutsche Bank?
Luxury shopping vouchers? Privileged privileges?
Nothing at all.

Given this, why not allocate some funds to this new bank that can bring more "added value"?
For ordinary wage earners and citizens, the logic is even simpler.

Depositing money into Far Eastern International Bank not only allows you to "preserve" its value by earning interest rates far higher than other banks, but also gives you free bread, kvass, sausages, pickled cucumbers, and other essential daily foods!

Simply changing your bank to deposit money doesn't result in any loss; on the contrary, it brings a whole host of unexpected benefits. It's like a windfall!

This situation has arisen as a result.

Long queues also formed outside major Western banks and Soviet state banks, but they were queuing to withdraw money.

They had just withdrawn their deposits when they turned around and joined the even longer queue of depositors outside the Far Eastern International Bank.

Housewives and elderly people who were used to hiding cash under their mattresses or in jars finally made up their minds and handed over stacks of rubles to the Far Eastern International Bank for the free bread and canned goods.

Driven by this massive base, the deposit figures in Far Eastern International Bank's back office are rising rapidly.

One million rubles... ten million rubles... one hundred million rubles... five hundred million rubles... one billion rubles...

The speed of growth is astonishing.

Every few hours, the numbers on the statistical reports are refreshed to a new high, and there is no sign that this growth momentum is slowing down.

Meanwhile, under Berezovsky's management, Auto Union continued sales day and night.

To fulfill its promise of "shopping vouchers," the Volga Automobile Plant had workers working in three shifts, with production lines running at full capacity, producing at breakneck speed.

The markets for Jeanswest and "One Ant" were bustling with activity, with transaction volumes repeatedly reaching new highs.

Faced with such a resounding success, Qin Yuan did not hesitate at all and immediately ordered Pan Shiyi to lead a team to open two more branches in the northern and western districts of Moscow.

His goal was very clear: to seize the time and establish a network of outlets.

The Far Eastern International Bank was to open branches in all major cities of the Soviet Union, absorbing as much ruble savings as possible!

He specifically instructed Pan Shiyi to encourage customers to deposit money in fixed-term accounts, with the longer the term, the better!

At the same time, lending business is basically frozen, except for mortgage loans, and the amount must be small and subject to strict regulations.

After all, lending money at this critical juncture is tantamount to giving away money that is about to depreciate significantly.

While aggressively absorbing deposits, Qin Yuan did not allow the massive amounts of rubles to lie dormant in the bank's vaults.

In addition to reserving necessary reserves for subsequent acquisitions of Soviet assets, he decisively converted most of his ruble funds into hard currencies such as US dollars through various channels.

Immediately afterwards, a massive buying spree began.

In the system's accounting rules, fixed assets are also included in the wealth value.

Moscow's real estate market, however, did not decline after the collapse of the Soviet Union; on the contrary, it continued to thrive.

In fact, it’s easy to understand.

Because with the collapse of the Soviet Union, the situation in other cities was even worse.

Wealth was concentrated in the hands of a few, and the wealthy and capable people in the local areas were all drawn to Moscow as if by a siphon.

This, in turn, further fueled Moscow's housing market.

Therefore, Qin Yuan first bought the Far East International's headquarters office building in Moscow.

Following that, they acquired the land of several branches, the entire plot of land of "One Ant" market, and the ownership of that crucial central warehouse.

In contrast, other Western banks were seeing their doors grow increasingly deserted. They had never expected that Far Eastern International Bank could open three branches in just one month, let alone that its deposit-gathering ability would be so terrifying.

What frightens them even more is that not only are small and medium-sized depositors leaving, but even some of their core clients are beginning to transfer large amounts of funds from their banks to Far East International Bank!

This is still manageable for powerful giants like Citigroup and Morgan Stanley, because it doesn't touch the root of the problem.

But for many small and medium-sized Western banks, this was a devastating blow.

The large number of people withdrawing their money directly caused a bank run.

Many banks simply cannot handle such a concentrated outflow of funds.

Ironically, some of the 150 billion rubles that syndicated previously lent to Qin Yuan came from these small and medium-sized banks.

Now, this money seems to have become a boulder that crushes them.

To survive, their only option was to follow the interest rates of the Far Eastern International Bank.

But a 20% annualized interest rate? They simply don't dare to follow that, nor can they afford it!

Besides, even if you did follow, what difference would it make?

Far Eastern International Bank has more tricks up its sleeve than just this one.

They give away free bread, sausages, canned cheese, and various discount coupons.

These things simply don't exist in the Western dictionary.

Left with no other option, many small banks had to temporarily close down.

This, in turn, exacerbated public panic and distrust of private banks in Europe and the United States, triggering a wider run on banks and creating a vicious cycle.

So at this moment, the surviving bank employees looked at the depositors queuing in front of the Far Eastern International Bank and their eyes were filled with tears.

Many bank employees were thinking of inviting these depositors in to rest for a while and to see the interest rates that their banks had increased.

As a result, not a single one came in.

Instead, they looked at them with wary expressions.

After all, they've been queuing for ages, who would want to give up halfway?

My cat "Katyusha" at home is waiting to use the discount coupon to buy new clothes!

At a time when prices are soaring and the ruble is visibly depreciating, only the Far Eastern International Bank appears to be so "conscientious".

To the average citizen, not depositing money there would be considered foolish.

This almost disruptive situation caught even world-class banks like Citibank, Morgan Stanley, and UBS off guard.

Williams and Herik, among others, even began to suspect that Qin Yuan's initial request for a 150 billion ruble loan was a carefully designed trap.

Is the goal to raise initial capital and then, in turn, devour their depositor base with higher interest rates and marketing tactics?

But they just couldn't figure out one thing.

Qin Yuan set such a high interest rate and invested such a huge amount in marketing.

Isn't he afraid that the ruble's depreciation will be slower than expected, and that all the huge interest and costs will eventually crush him?

Qin Yuan wasn't afraid at all.

Because in Qin Yuan's view, he is not losing money right now.

Instead, they were picking up money.

Moreover, he had obtained the definitive information—enough to render all financial models ineffective—from more than one source.

Catherine, Luzhkov, and officials of all ranks in Moscow were all sending him the same signal:
The Soviet Union's new economic reform plan, the final document that would initially open the floodgates to the privatization of state-owned assets.

All procedures have been completed, and the official announcement will be made at the end of this month!
A real storm is coming.

He had made thorough preparations.

(End of this chapter)