Chapter 1314: Chicago Mercantile Exchange Backstabbing

The crisis facing Continental Illinois Bank was not only something the US government did not want to see, but also the Rockefeller and Morgan consortia.

So after James McCormick's activities, other bigwigs also helped behind the scenes.

That same afternoon, the Office of the Comptroller of the Currency, the main US regulatory body, held a press conference, at which the head, Todd Combs, publicly stated that it had no reason to doubt the solvency of Continental Illinois Bank.

That afternoon, Moody's, one of the world's three major rating agencies, once again issued a rating for Continental Illinois Bank, which was still AAA.

These two consecutive positive developments did help to restore some confidence in foreign financial institutions.

However, by the end of the day, as many as 16 banks had still applied to withdraw their deposits, totalling 1.06 billion US dollars.

Harris Rothschild, of course, was not willing to accept this.

He continued to manipulate the media behind the scenes to report on the news of Continental Illinois Bank, and no longer limited himself to financial media, but expanded to other news media.

In these news reports, he also pointed out that some banks had deposits in Continental Illinois Bank, which were at risk of loss.

In this way, he wanted to force other banks to withdraw their funds to avoid possible trouble.

In addition, he used other means, with the result that on the morning of 24 May, the Chicago Mercantile Exchange withdrew 50 million US dollars from its account with Continental Illinois Bank!

The Chicago Mercantile Exchange itself is a large and established futures exchange, with a concentration of domestic and foreign financial companies, and it has the influence of a weather vane.

The CME is a long-standing and major futures exchange, with financial companies from home and abroad gathering there, and it has the influence of a weathervane.

When it chose to withdraw 50 million US dollars, the news could not be hidden at all, and it instantly spread throughout the commodity exchange.

The heads of all financial institutions had goosebumps and realised that the problem had become even more serious.

And the one who reacted the most was James McCormick!

When he heard the news, he jumped up from his seat as if his bottom was on fire.

In the face of the facts, the assurances of the Office of the Comptroller of the Currency and the certification of Moody's were empty and powerless.

On that day, the foreign customers of Continental Illinois Bank withdrew a large amount of money, with the daily application amount reaching 1.57 billion US dollars!

Together with yesterday's, a total of 2.63 billion US dollars of funds stopped rolling or were withdrawn in two days.

The Continental Illinois Bank's liquidity is about to run out, with less than 50 million US dollars left, and this is still after 780 million US dollars worth of withdrawal applications have been rejected.

James McCormick dares not approve any withdrawals, because even if he did, there would be no money to pay them out. At this point, rejecting the applications is the best option.

He immediately called the Chairman of the Federal Reserve, Volcker, the Chairman of the Federal Deposit Insurance Corporation, Isaac, and the Director of the Office of Thrift Supervision, Connaughton. All three men were nervous when they got the news and immediately called their subordinates to discuss a response.

James McCormick did not give up on saving himself.

That evening, the patriarchs of the four Chicago financial families gathered together again.

'James, what's the situation?'

asked Keston Wood as soon as they sat down.

James McCormick did not hide anything and informed the three of the situation. After he had finished, he said worriedly, 'We have to make a decision soon!'

'Tomorrow's situation will be even worse, and it is likely that the amount of withdrawal requests will exceed 2 billion US dollars, or even more!'

Wark Krone nodded solemnly: 'Yes, we have to give up.'

'Continental Illinois Bank cannot fall. Our four banks are closely linked. If Continental Illinois Bank falls, the other three of us will also be in the eye of the storm and risk being bankrupted by a run on the bank.'

'The bank must not fail. If it does, all our companies will suffer!' Simmons Amo said this with a worried expression on his face.

The four major banks are the financial core of the Chicago Consortium, linking all the companies in the consortium.

Each company is a customer of the Big Four banks, and not only does the cash flow go through them, but there is also a large amount of loan business within the Big Four banks, with the collateral being the company's equity.

If the Big Four banks go bankrupt or are taken over, then it is equivalent to the entire Chicago consortium being taken over as well.

Unless the company's loan relationship with the bank is terminated in advance.

But, that also requires money!

Now, all four of them have taken money from other companies, totalling 8.3 billion US dollars, and now the capital chains of each company are tight.

Even if all of this $8.3 billion is returned, it is actually not enough for the major companies to repay their loans. It would be good to be able to save some of it.

'Let's not hesitate, James. Although help has been requested from the Federal Reserve, the Federal Insurance and the government, it will be slow to come.

'Even if they choose to help, the funds will not be free, and the amount is still unknown.

'Give up attacking the Canadian currency market. We will withdraw completely, not only from the Big Four banks and other financial companies, but also withdraw our own private investments.

'At the current exchange rate of the Canadian dollar, we have actually made quite a lot of money, which can be used to alleviate the crisis.'

'Of course, it would be best if we surrendered to the Rothschild family and asked them to stop attacking the Continental Illinois Bank.'

Creston Wood sighed and decisively proposed.

'But they will seize the opportunity to drive down our price, and we will at least make 200 million less!'

Simmons Amo smacked his lips and shook his head, feeling bad in his heart.

This was to be expected. A liquidation sale would definitely result in the lowest possible price if it were to be concluded with the major Canadian banks and related financial institutions.

If it were to be concluded with other newly-entered speculators, it might be a little better, but there would be major problems in terms of time and efficiency.

After all, there were too few powerful speculators.

The four major banks and related financial institutions alone, plus the funds they have invested privately, amount to more than 20 billion US dollars. This volume of contracts is too large, and there are not many who are powerful enough to take it all.

'We have no choice. If we surrender to the Rothschild family and withdraw in all aspects, we can even help the short sellers, and the Rothschild family should be willing to give up attacking us.'

'After all, we have already withdrawn, and we no longer have direct conflicts of interest with them.'

As soon as Ceston Wood finished speaking, Simmons Amo said, 'No, if the crisis at the Continental Illinois Bank expands, it can definitely tie up the funds and strength of other major domestic banks. This is an indirect way to weaken the short positions, which is extremely beneficial to the longs. They will not necessarily let us go.'

'Forget it, let's give it a try. If they don't want to, then forget it.' At this point, James McCormick finally expressed his own attitude.

The other few people looked at each other and nodded in agreement.

'Let's start moving tonight, first go negotiate.'