What do banks fear most
It doesn’t require much professional knowledge, but ordinary people with a little experience can probably understand it in two words: run.
Once a run occurs on any bank, the results will be catastrophic.
In just one day on February 26, the regulatory authorities' investigation and the withdrawal of Westinghouse Electric, the panic caused by the two major negative superpositions, quickly caused a run on Mellon Financial Group by customers.
As an old local bank established for more than a century, Mellon Financial Group's market value reached US$13.9 billion the day before the incident. However, as of the closing of the afternoon that day, under the impact of continuous negative news, Mellon Financial Group's share price plummeted by 21%, with a closing market value of only US$10.9 billion. In one day, all shareholders of this bank suffered book losses of 3 billion US dollars.
The plummeting stock price is second, and everyone understands that the most serious problem is the run.
If this problem cannot be resolved quickly, Mellon Financial Group, a century-old local bank, may not even survive next week and will collapse, and will have more negative cascading effects.
In the next two days, the incident continued to unfold, and no miracle occurred.
Mellon Financial Group's valuation continued to fall by 13% and 9% respectively in the next two trading days. By the close of trading on Friday, the market value had plummeted from US$13.9 billion three days ago to US$8.6 billion. At the same time, for three consecutive days, the bank's customers have accumulated cash withdrawal and transfer applications as high as 6.7 billion U.S. dollars. However, this old local bank with assets of 43 billion U.S. dollars, according to the federal deposit reserve ratio of about 8% at this time, can withdraw money in the short term. has less than $3.5 billion in cash.
Therefore only extraction can be restricted.
This instead caused further panic and runs.
Pittsburgh.
In a manor owned by the Mellon family.
It's Friday night.
Most members of the Mellon family, which had been gradually divided since the death of Andrew Mellon, rarely got together again. The first thing that ushered in was a fierce quarrel. The two sides of the confrontation were Richard, who had caused all this today. Mellon Scaife and his sister Cordelia Scaife May.
Their mother, Sarah Cordelia Mellon, is the granddaughter of Thomas Mellon, the founder of the Mellon family. Due to the inheritance dispute after their mother's death, the fourth son of the Mellon family, both in their sixties, The siblings haven't spoken to each other for nearly thirty years.
"You have been like this since you were a child. You are an arrogant and incompetent idiot. You know nothing but drinking and playing with women. When you live to be sixty, you can still only do these stupid things that bring harm to the family."
"Bichi, at least I didn't implicate you, right! Or? Don't tell me that you secretly followed everyone to invest in shorting technology stocks and lost a lot of money. That can only mean that you are even more stupid."
"If I had known that it was you, a fool, who was behind this? I wouldn't have invested a penny even if I were killed. Hey? I lost some? But look at you, you took so much back then, how much will you have left this time?" Haha? I'm waiting to see you go bankrupt? Idiot."
"I should take more. At least I have done something over the years. What about you, besides enjoying life on your mother's inheritance? What have you done? You have done nothing!"
"Did you do something? Create a 'media group'? And then provoke the president? Dig other people's privacy? Hey? What did you dig up? Clinton is still in the White House, but this time, Mellon Financial was suddenly investigated. , why do you think that is, idiot? Why do you think that is?"
"Bichi? Shut up."
"idiot!"
When the quarrel between the two almost reached the level of physical conflict, Timothy Mellon pushed his father, Paul Mellon, in. The 90-year-old man sitting in a wheelchair motioned his son to come forward and started swinging. The cane struck Richard Mellon Scaife, finally stopping the dispute.
Interrupting the quarrel between the two juniors? Paul Mellon glanced around all the juniors in the hall and signaled to his son again.
Timothy Mellon didn't talk nonsense. He looked at the people standing and sitting around him and said: "Frank Court came back from Washington in the afternoon. The authorities want to ask the Bank of New York to take over Mellon Financial. So, everyone, please share your opinions." Bar?"
Frank Court is the CEO of Mellon Financial Group. He has held this position since 1987 and has been a loyal spokesperson for the Mellon family.
As soon as Timothy Mellon finished speaking, one of his cousins, Matthew Mellon, said: "It's so obvious, this is a conspiracy. I remember that Bank of New York tried to acquire Mellon Financial last year. "
Another Richard Prosser Mellon, who was on the same team as Richard Mellon Scaife, said: "Timothy, I just want to know what we can get by agreeing to take over the Bank of New York, or , to put it bluntly, what do we have left?”
Timothy Mellon looked at his cousin who was a few years older than him, shook his head and said: "This is just Washington's request for Mellon Finance. Regarding our matters, after the decision is made tonight, we still need to cooperate with Washington." Keep in touch.”
Cassandra Mellon, another middle-aged female member of the Mellon family, said: "If Washington doesn't make a promise, we can't promise anything."
"Cass, the problem now is that we only have one night to make a decision. You know, although the stock market is closed on the weekend, the run is still going on, and we can't afford to delay it."
Cordelia, who had just finished arguing with her brother, interjected: "Then don't talk about anything. If Mellon Financial collapses due to a run, we will not be the ones to lose the most. I don't believe that the White House dares to watch this happen?"
“It would be as simple as that,” said Matthew Mellon just now: “If we don’t actively cooperate and the situation of Mellon Financial deteriorates to a certain extent, the authorities will have the power to take over by force. At that time, we will completely lose the initiative. "
Cassandra Mellon added: "Then we can't compromise without talking. I still insist that Washington must give us a promise before we can make concessions."
"The key is time."
"Why don't we wait until Monday and see?"
In the hall, Paul Mellon, the only living son of Andrew Mellon, leaned on his wheelchair and listened quietly to everyone's arguments for a while, feeling inexplicably sad.
Thinking about the glory of the Mellon family in the past, and looking at these people now, they only think about retreat and escape. In fact, these children of the family did not even mention the name of the young man who caused all this. It is conceivable that , let alone fight against it.
Thinking of this, Paul Mellon raised his hand slightly to interrupt everyone, and then looked at Richard Mellon Scaife, who had been silent just now: "Charlie, why don't you tell me?"
Richard Mellon Scaife had just been slapped by the old man who was supposed to be his uncle. His shoulder was still hurting. Hearing this, he stretched his neck slightly and looked at the chandelier on the ceiling: "I have nothing to say."
Cordelia, who was next to her, immediately mocked him: "Yes, he always acted like a scoundrel when he got into trouble since he was a child, and then waited for his parents to clean up the mess."
Paul Mellon glared at the sarcastic niece, and then slowly glanced at the crowd. Seeing that these younger generations all looked away, he felt even more depressed. If the Mellon family can stick together, they may be able to gain some of their accumulated heritage over the past hundred years. Now, facing a behemoth, with people's hearts scattered and no fighting spirit, even if he, an old man, still has some ideas, he can't do anything about it. cast.
Pursing his dry and old lips, Paul Mellon finally said: "Since you all can't make up your mind, I will let Tim handle this matter. You should be mentally prepared. Mellon Finance will definitely not be saved. However, If nothing else, after giving up Mellon Financial, the other party... will no longer pursue it. So, Matthew, Cass, and Charlie, do you have any objections? "
Everyone was silent for a moment.
Cassandra Mellon said again after a moment: "Uncle, really... can it end if we give up Mellon Financial?"
"If you look at the Hearst family, you will know that Simon Westeros is not a person who likes to chase after someone. All he wants this time is Mellon Finance," Paul Mellon finally said a certain name , glanced at the expressions on everyone's faces again, and added: "The premise is that you will not provoke him in the future and live your own lives peacefully."
The atmosphere was inexplicably awkward, and some family members looked at Richard Mellon Scaife again.
Being stared at by a bunch of eyes, Richard Mellon Scaife quickly blushed and said angrily: "Simon Westeros, who is he? He's just an upstart. What's the big deal? Two years ago, Wood The bombing of Field House, I let..."
Before Richard Mellon Scaife finished speaking, Paul Mellon had already thrown the crutch in his hand to the nephew who could not see the situation clearly, and said viciously: "Idiot, you are now Can’t you see the situation clearly? The Woodfield Manor bombing, hey, why didn’t you uncover the Kennedy assassination? Look at who dared to investigate that matter over the years. Look at what happened to the children of the Kennedy family. What do you think? Kill us all?”
Richard Mellon Scaife was also angry at first and was continuously targeted by his uncle. He couldn't bear it anymore and roared: "I won't harm you, just treat me as an outsider. From today on, I will Is it okay to sever ties with the Mellon family?"
When Paul Mellon saw Richard Mellon Scaife's red-faced words, he became even more angry. He stared, his lips trembled, and his arms waved slightly. Unfortunately, the crutch in his hand had been thrown away, so he could only raise his hand and point at Scaife. Said: "Cut off the relationship, haha, everything you have now is given to you by the surname Mellon. You should spit out all the property in your name first, and then talk about severing the relationship. Come, as long as you are willing, I will do it now Would you like to call a lawyer over?”
Seeing the ferocious look of the old man who was about to stand up and pounce on him, Richard Mellon Scaife finally calmed down due to the majesty cultivated by his uncle since childhood, but he still stiffened his neck and stopped answering.
Timothy Mellon knelt down to help his father hold his chest to breathe, paused, and whispered to everyone: "I called a friend at the FBI. He said that all the evidence files about the Woodfield Manor bombing case , all of them disappeared mysteriously last year. Now, even if... Westeros personally comes out and says that he did it, there is no evidence."
After Timothy said this, everyone looked at each other in shock.
Paul Mellon recovered under the comfort of his son, and finally spoke again, with a dejected tone: "That's it, you all go back and prepare. Although this time the Bank of New York is definitely a share exchange merger, the Mellon family's Don’t keep any shares, sell them all, and we will exit completely.” After saying this, Paul Mellon once again looked at a certain nephew who was unhappy: “Also, Charlie, your “Pittsburgh Tribune” is about to Just drop it. Anyway, you know that even if it doesn’t close, this newspaper won’t last for a few years. Tim asked, you don’t have many advertising orders there anymore.”
Paul Mellon's tone slowed down, and Richard Mellon Scaife, who was already timid, did not talk back again, but he still tentatively said: "Is it okay if I sell it?"
Paul Mellon hated iron and said, "Who do you plan to sell to, and who do you think dares to ask for it?"
Richard Mellon Scaife paused and nodded slightly without any trace.
Paul Mellon opened his mouth and wanted to give some more advice. After thinking about it, he had no words. He raised his hand and waved: "In this case, let's all leave. From now on... Hehe, I don't have much time left. I can't control it anymore." .”
Once the Mellons made their decision, things began to turn around quickly.
After a day of emergency consultations the next day, early on Sunday morning, the Bank of New York publicly announced that in view of the sudden crisis of Mellon Financial Group, with the support of regulatory authorities, the Bank of New York would conduct an emergency investigation on Mellon Financial Group. After the takeover, the board of directors of Mellon Financial Group was dissolved on the same day, and CEO Frank Cotter resigned. However, he will still assist in the subsequent merger of Mellon Financial by the Bank of New York.
Mellon Financial Group's board of directors previously had a total of eight members, five of whom were representatives of the Mellon family. The Mellon family has long controlled this old bank with a total shareholding of less than 10%.
Now, the board of directors has been dissolved, and Bank of New York will take over and merge with Mellon Financial, completely announcing the end of the Mellon era.
Not only that, apparently in order to alleviate the bank's run situation, Westinghouse, which had just announced its separation from Mellon Financial a few days ago, suddenly changed its attitude and took the initiative to clarify that its response to the authorities' investigation of Mellon Financial's internal problems was excessive, so it withdrew its The previous decision will continue to cooperate with this bank in the future.
Such a roller coaster of twists and turns has puzzled countless onlookers, and even a famous financial reporter from the Wall Street Journal called out the conspiracy on his Facebook.
The financial reporter also uncovered a piece of news at the end of last year about the rejection of the Bank of New York's acquisition of Mellon Financial Group. Therefore, he judged that the series of events that occurred in the past few days were all due to the Bank of New York's attempt to annex Mellon Financial Group. Disgraceful means adopted.
Unfortunately, the overall situation has been decided, and these voices that did not delve into the deeper inside story did not cause any waves in the mainstream media.
As for the few people at the top of the pyramid who roughly knew the causes and consequences of all these events, they were once again shocked by the avalanche of the Mellon family's helpless defeat in the face of the Westeros system, and inevitably felt a little more awe and fear.