Chapter 613 Richard

"Frankly speaking, I think the government needs to come up with funds to support domestic subprime mortgages. The United States has already done so, mainly facing ordinary people with a certain repayment ability, and has come up with more than 100 billion US dollars to ensure that they have paid their mortgages for quite a long time, so that their houses will not be repossessed due to temporary difficulties."

As mentioned before, the financial policy of the British government is still based on liberalism with very little intervention. This policy will make the financial system more dynamic in normal times, but when encountering serious damage like the subprime mortgage crisis, it is often easy to cause a chain of disaster consequences in the financial system.

This time, Barron met with Finance Minister Darling to persuade the other party to agree to provide assistance to ordinary people who have difficulty repaying their mortgages, so that Britain can launch a rescue plan similar to the previous American "lifeline" plan.

"The rescue I'm talking about is not for the relevant banks, but for those who are normally able to repay their mortgages, but are temporarily in difficulty due to the subprime mortgage crisis. These groups are the backbone of our society, and we need to ensure that they can survive this crisis and keep the properties they bought."

Barron did not lie to Darling. Such rescue measures are indeed very necessary. If it is purely for investment in real estate and speculation in the form of leverage, then there is no need for the government to provide rescue.

But there are still many people who need to buy a house and have considerable repayment ability, but because of the impact of the subprime mortgage crisis - or other investments have suffered losses, or because the company they work for suddenly closed down, or they were laid off... and other unexpected reasons.

If it is normal, then the government can still maintain a "free economy", but in this case, it is necessary to suppress panic and give some support to the "middle class" to survive the crisis.

Of course, Barron and others have already understood the attitude of the British government.

Therefore, last month, the four major listed banks in the UK - HSBC Holdings, Royal Bank of Scotland, Standard Chartered Bank and Barclays Bank jointly established a crisis response fund of up to 50 billion pounds to provide guarantees for some non-performing assets of some British banks affected by the subprime mortgage crisis.

Naturally, the objects guaranteed by this fund also need to be reviewed by a temporary agency composed of four banks.

And this time, the government's rescue plan is not only promoted by Barron, but also by senior executives of other banks.

After all, these banks are more or less involved in housing mortgage loans, and they certainly hope that the government can provide assistance to some users with better qualifications to reduce the proportion of their non-performing assets - even if they can recover the mortgaged properties when facing customer defaults, they are banks, not real estate sales companies, and they don't want to spend too much energy to deal with these properties.

Moreover, from last year to now, the entire British real estate market has continued to fall, and the market value of almost all mortgaged properties is lower than the mortgage loans they provide...

Among them, Standard Chartered Bank is still the best, because after being acquired by Barron, Standard Chartered Bank has strictly controlled the issuance of housing mortgage loans, especially those high-risk subprime mortgage loans, and their operating scale only accounts for a very low proportion.

And this type of non-performing assets of Standard Chartered Bank mainly comes from the related businesses of Northern Rock Bank they acquired.

If these businesses of Northern Rock Bank account for a high proportion for this bank, then they are not too high when put on the scale of Standard Chartered Bank.

And before Standard Chartered Bank acquired Northern Rock Bank, these non-performing assets had already reduced a considerable proportion of the market value of Northern Rock Bank.

Then just recently, Cavendish Trust injected 10 billion euros of the profit it made from the short selling of DS Group into Cavendish Asset Management Company under the trust fund, and purchased assets worth 10 billion euros from Standard Chartered Bank through Cavendish Asset Management Company.

These assets are all from some of the non-performing assets of Northern Rock Bank acquired by Standard Chartered Bank - some properties that were recovered because of the "breakdown" of mortgage loans.

After purchasing these properties, Cavendish Asset Management Company will simply organize and renovate these real estates and temporarily rent them out - after the British house prices rise again, even if the rent is not counted, it can still obtain satisfactory returns.

And Standard Chartered Bank also recovered funds by selling these assets, greatly reducing its non-performing asset ratio, and by the way, it can also repay a considerable part of Northern Rock Bank's previous short-term high-interest foreign debt.

It can be said that this is a win-win situation. At present, it seems that Cavendish Asset Management will suffer a little loss - although they bought these properties in a package at a price slightly lower than the current market price, the real estate in Britain is still falling, and the market is not optimistic about this. The subsequent transaction may soon show a loss on the books.

But Barron understands that the real estate market in Britain, especially the real estate market in London, will rebound again in the next few years and will be higher than the previous price. As a long-term investment, this transaction of Cavendish Asset Management can at least be satisfactory in terms of returns.

…

On September 8, Bonnie Cavendish began to respond three days before her due date.

That night, in the best maternity hospital in London, while Barron was anxiously waiting, Bonnie gave birth to their second son.

"Thank you for your hard work, baby."

Barron held Bonnie's hand, looked at her weak appearance, and kissed her on the forehead.

"I want to see our child..."

"He was just taken out to be cleaned up, and I believe he will be back soon."

Of course, as Barron's offspring, after the child was born, someone would accompany the nurse throughout the process to ensure the safety of the baby.

Just as Barron's voice fell, the nurse had already brought the baby in.

"Look, how cute he is, just like George when he was a child..."

Barron took the child, put it in front of Bonnie, and said to her softly.

Their child is also the second heir to the title of Duke of Devonshire. Barron named him Richard Cavendish.