On January 22, 2016 (December 13, 2015 in the lunar calendar), the truth about the ABC's "3.9 billion bills turned into newspapers" case was exposed. A major bank case by the Agricultural Bank of China has made the gray food chain of "bill Jianghu" the focus of public opinion. Agricultural Bank of China (601288.SH) issued an announcement on January 22, 2016 stating that a major risk event occurred in the bank's Beijing Branch's bill purchase and resale business. After verification, the amount of risks involved was 3.915 billion yuan. According to media reports, a strange thing occurred in this bill package that some bills were replaced by newspapers, and no ledger was established for the entry and exit of bills. At present, the public security organs have filed an investigation. Many industry insiders interviewed by the reporter said that it not only involves ABC's internal control issues, but also involves many banks. The bill market has long-standing shortcomings. Funds are caged out of banks and eventually enter high-return areas such as the stock market. This is what bill brokers are good at. If it weren't for the "ebb tide" caused by last year's huge stock market shock, those who "naked swimming" might not have been seen through so quickly. Agricultural Bank of China (601288.SH) issued an announcement on January 22, 2016 stating what happened to the Agricultural Bank of China's 3.9 billion bill case. In this case, the Agricultural Bank of China's northern distribution of 3.9 billion bills, money was obtained through illegal means and invested in the stock market. At that time, the stock market entered the "mad cow stage", and private hot money, mainly capital allocation, was extremely active. However, with the tightening of supervision and the rectification of the over-the-counter fund-allocation business, the market trend turned downward, and fund-allocation accounts exploded one after another. A large portion of the 3.9 billion yuan in Agricultural Bank of China Beifen's capital went into the stock market, and most of it may not be possible to recover it now. Readers can use the above picture to understand the specific situation of the incident in the North Branch of Agricultural Bank of China. This incident is a typical case of "multiple marriages with one vote". What are bills? If you want to have a clearer understanding of the specific circumstances of the Agricultural Bank of China's incident, you must first understand assets such as bills. Bills can be divided into two types: bank acceptance bills (banknotes) and commercial acceptance bills (commercial bills). For example, there are two companies A and B. Party A sold rice worth 5 million yuan to Company B. Company B was short of funds, so it went to a bank loan. The bank was also short of money at the end of the year and was unwilling to lend to Company B. Just tell Company B this: I will write you a letter of commitment, and I promise that I will definitely pay in six months. You give this letter of commitment to Company A. Company A was naturally relieved when it received the bank's letter of commitment. This letter of commitment was a silver bill. Commercial bills are similar to banknotes, except that the main body of the promise has been changed from banks to large state-owned enterprises and listed companies. However, people still prefer to trust banks and believe that banks are backed by the country and will not fail. Therefore, commercial bills currently account for a small proportion in the domestic market. Of course, the example mentioned above is the ideal use of bills, but in reality, bills are not played like this. First of all, we must explain why banks are unwilling to lend to enterprise B. The real reason is that the bank's deposit-to-deposit ratio (the ratio of bank loan balance to deposit balance, 75% is the policy red line) forces banks to reduce the deposit-to-deposit ratio. Following the example above, if the bank provides Company B with a loan of 5 million yuan, the loan end will be reduced by 5 million yuan, which is not cost-effective. If Company B is issued a bank note of 5 million yuan (50% is guaranteed by collateral and the other 50% is guaranteed by margin), it will become that the bank has obtained a deposit of 2.5 million yuan from Company B, reducing the loan-to-deposit ratio. At the same time, since banknotes are off-balance sheet businesses in banks and are not limited by the deposit-to-deposit ratio, banks are certainly willing to, especially when their funds are tight. Company B was miserable. It was already insufficient funds and had to pay a deposit of 2.5 million yuan to the bank before it could get 5 million yuan in bills. Forced companies can only borrow money through private lending (with higher interest rates), deposit the borrowed money in banks to obtain banknotes, and then discount them through bill intermediaries (brokers), thus creating a huge bill black market. In addition, since the term of banknotes is generally less than half a year, companies need to make capital turnover every six months and pay high interest costs. Bill brokers, the initiator of the dangerous game. Since relevant regulations require that the issuance, acquisition and transfer of bills must have a true trading relationship and credit-debt relationship, most companies that want to discount do not meet the conditions, so bill brokers are used. Bill brokers are actually bill packaging companies that help companies package bills that have no real trade background and do not meet bank discount conditions to meet bank discount requirements and obtain funds. The process of packaging bills basically takes two people, a table, and a few official seals. For example, if you have a computer and graphics software, and a lot of real invoices, you can complete the real invoices with the name of the company. You can handle any amount required. Looking back, in this case, in addition to the employees involved in the case, the bill brokers could be said to have contributed "inexhaustible". Bill brokers are an important part of bank bill business at a certain stage. As bill brokers become increasingly powerful in the market, their dangerous features are also fully exposed. Bill brokers well check and balance multiple interests, including banks, and use their resource advantages among banks to keep this "dangerous game" sustainable. In fact, the bill industry is not standardized, and ABC's 3.9 billion yuan is just the tip of the iceberg. The bill market that participates through bill brokers is far more terrifying than this. The above picture is the author's summary of the arbitrage methods widely used by bill brokers. The second one is the method used in this bill case in Agricultural Bank of China North Branch mentioned above. Due to the existence of bill brokers, the entire bill operation process becomes efficient. When there are no problems, all parties are peaceful. Once a systemic crisis occurs, you will see who is "swimming naked". The above figure mainly describes the third arbitrage method, which is to use multiple banking channels to "wash" commercial bills and put risks into the pockets of major stock banks. Why banks drink poison to quench their thirst? Since the harm of bill brokers to bank bill business is obvious, why have banks been unable to cure this problem? In fact, it is not so easy to eradicate bill brokers. First of all, banks have the need to move the scale inside and outside the balance sheet. Most banks hope to hold bills in the short term and increase traffic without actually making capital contributions. Secondly, bill transactions are not profitable to banks, and bank operators also want to save money and trouble, which opens up the way for bill brokers to make a fortune. Banks originally had many restrictions on their bill business. Relatively speaking, although the business of bill brokers was not standardized, it was extremely efficient. They can even complete the endorsement themselves, which helps banks easily complete bill transactions. Of course, irregularities will inevitably be mixed with risks. While enjoying easy services, crises will also breed. The impact of bill financing The previous paragraph describes bill brokers in a large amount. The purpose is actually to explain the Internet bill financing platform, because the Internet bill financing platform essentially does something similar to bill brokers. The initial understanding of bill investors was that the authenticity of bills was an important basis for the safety of bill financial management. In fact, the first challenge comes from the credibility of the platform. The bill financing platform obtains bills from enterprises and raises funds from investors on the platform. In this process, the bills are placed in the hands of the financial platform, and the investors do not have the bills. Rights and interests. Therefore, what investors need to understand before investing is that they invest but do not own the rights and interests in the notes. The real rights and interests of the bills lie on the platform, and whether to trust this platform has become the key point of this investment. Following the previous question, another question arises. Since investors cannot enjoy the rights and interests of the note, does this note really exist? Could it be a fictitious bill like a bill broker? Even if there are photos of bills on the platform, the platform is still indisputable. Then there is another question, that is, after the bill financial product takes effect, will the platform privately discount the bill and then use the money to start other businesses, or in cases like ABC, using the platform's institutional loopholes or colluding with others to take out the bill and "marry more with one vote." In order to gain the trust of investors, many platforms say that their bills are held by banks. However, the actual situation is that only a very few platforms have published their own custody certificates, and most platforms have no verifiable information. In short, the essence of making bills through the Internet is to promote the process of transparency in bill financing. However, the current stage is still too preliminary and there are many loopholes that need to be filled. Therefore, it is still too early for those who evaluate the low risk of bill financing products.