Crisis: After Detroit, are there cities in the United States going bankrupt?

        Flint, USA, suffered from public service crisis one after another and was in depression.

        On August 1st, Flint, Michigan, USA, announced the suspension of garbage collection services in the whole city because the new contract of service providers has not been finalized, which caused the city to fall into a new crisis after the water crisis. Although on the second day, the city urgently reached a temporary agreement with the original service provider Republican Service Company, the economic and financial difficulties faced by Flint once again attracted attention.

        Flint, who didn’t collect garbage, suffered from "shutdown" of public services.

        In June this year, the mayor of Flint, Weaver, proposed to replace the new garbage disposal service provider in the city for financial reasons, but this move was rejected by the city Council. Later, Weaver vetoed the decision of the city Council, and the city government and the parliament turned into a "tug-of-war". Finally, the two sides went to court.

        However, before the court ruled, the contract between the city and the current garbage disposal service company expired at the end of July, so the garbage collection service stopped on August 1. Flint residents can only "store their garbage at home". This triggered the anger of the people in Flint.

        Although the city urgently agreed with the current garbage disposal service company, it will continue to provide garbage collection services during the transition period. However, there will still be delays in the recent garbage disposal.

        Flint: The birthplace of General Motors used to be the "Automobile City" 

        Flint, Michigan, the birthplace of American automobile giant General Motors, is called "Motor City" together with Detroit. But in the 1980s, the automobile industry began to withdraw from Flint, and the city also declined rapidly.

        At present, the unemployment rate in Flint is 13.9%, which is twice the average level in the United States, and the per capita income is less than $15,000, which is only half the average level in the United States. More than 40% of the city’s population lives below the poverty line, and the crime rate remains high, ranking "the most dangerous city in the United States".

        In 2014, in order to save the government’s public expenditure, the Flint municipal government decided to abandon the Detroit water supply system and take water from the local flint river, which eventually led to the serious lead content in tap water consumed by 100,000 local residents.

        Economic and financial difficulties, many cities in the United States are facing a crisis of decline

        In fact, Flint is not a case. There is a well-known "rust zone" in the United States. The "rust zone" refers to the area where industry once flourished and now it has declined. In the United States, the Great Lakes region belongs to such a "rust zone", and Flint is located here.

        The "rust zone" in the United States used to be the gathering place of old industrial areas, but now, many cities are facing the difficulties of old infrastructure and economic and public services. When talking about this topic, I have to mention Detroit, the "city of bankruptcy".

        Detroit: the scenery is infinite to bankruptcy protection

        As the three major automobile companies in the United States — — Detroit, the home base of GM, Ford and Chrysler, became synonymous with American cars as early as 100 years ago. However, due to the single industrial structure, with the decline of the American automobile industry and the migration of production bases, Detroit went into decline.

△ Detroit (data map, from the network)

        In July 2013, Detroit filed for bankruptcy protection because of its debt exceeding 18 billion US dollars, becoming the largest city in the United States to file for bankruptcy protection.

        In 2014, the total population of the city has dropped to 700,000, and as many as 40% of the houses in the city have been abandoned. At the same time, the unemployment rate and crime rate have soared, and education and public service facilities have declined. Some people joked that an Apple mobile phone can buy a suite in Detroit.

        Cleveland: manufacturing base to the most miserable city

        Cleveland, Ohio, used to be the transportation center and steel manufacturing base of the United States. In the 1950s, it had a population of more than 900,000, but after that, the manufacturing industry encountered bottlenecks and the city gradually declined.

        At present, Cleveland has a population of less than 400,000, of which African Americans account for 44%; The crime rate here is very high, with more than 100 murders every year. In 2010, Forbes magazine published the list of the "most miserable cities" in the United States, and Cleveland ranked first.

        Chicago: The next Detroit?

        Chicago, a third-party big city in the United States, started from the steel industry and manufacturing industry. However, in the 1970s, the steel industry was depressed and manufacturing enterprises moved out, and Chicago constantly encountered challenges. In recent years, Chicago is facing the pressure that the government cannot make ends meet and the huge deficit is difficult to resolve.

        Statistics show that in 2015, Chicago’s budget deficit reached 1 billion US dollars, about 6 billion yuan. In order to control government spending, Chicago even raised the charges for 911 calls. Many people say that if Chicago can’t solve the financial crisis, it is likely to be dragged down by huge debts and become the second Detroit.

Corporate Governance Department of the General Administration of Financial Supervision: Preventing the disorderly expansion of industrial capital in the financial sector

The Beijing News Shell Financial News (Reporter Huang Xinyu) The Central Financial Work Conference pointed out that the prevention and control of risks should be the eternal theme of financial work, and the focus should be on comprehensively strengthening supervision, preventing and defusing risks, and firmly holding the bottom line of no systemic risks. The Corporate Governance Supervision Department of the State Financial Supervision Administration (the "General Financial Supervision Administration") said in a column on January 9 that it would take strengthening corporate governance supervision as the starting point and show new achievements in "doing a good job in risk isolation between industry and finance" and "preventing and resolving the unique risks of insurance groups".
Official website, the General Administration of Financial Supervision, showed that after the announcement of the "three-set" plan, the main responsibility of the Corporate Governance Division at present is to formulate a corporate governance supervision system; Carry out equity management and corporate governance supervision, undertake off-site monitoring, risk analysis and regulatory evaluation of financial holding companies, insurance groups and other institutions, conduct on-site investigations according to the needs of risk supervision, take regulatory measures, and carry out case risk disposal.
In terms of "doing a good job in risk isolation between industry and finance", the Corporate Governance Department of the General Administration of Financial Supervision put forward that financial holding companies will be urged to strengthen the construction of "firewalls" between financial enterprises and non-financial enterprises, and between financial institutions, adhere to the principle that "managing the law is more important than managing the illegality" and "managing the industry must manage the risks", and strengthen supervision coordination with other financial management departments, industry authorities and local party committees and governments to prevent the disorderly expansion of industrial capital in the financial field.
In terms of "preventing and resolving the unique risks of insurance groups", the Corporate Governance Department of the General Administration of Financial Supervision will also urge insurance groups to strengthen the asset-liability matching management of the main insurance business, avoid blind and radical expansion of the business side, and prevent key business risks such as spread loss and credit insurance. At the same time, on-site assessment of solvency risk management ability of insurance groups is carried out regularly, and capital constraints are effectively strengthened. Strengthen the management orientation focusing on the main business, and strengthen the management of non-insurance subsidiaries and major equity investments. Strengthen the group’s risk management and control, and check the problems through the special audit of risk contagion to prevent internal risk contagion.
In addition, it is noteworthy that in the column, the General Administration of Financial Supervision has made it clear that it will strengthen the institutional supervision of insurance groups and financial holding companies. Study and establish an off-site supervision framework for financial groups with similar or unified rules, and strengthen the qualification requirements for shareholders and directors. Clarify the functional orientation of financial holding companies and strictly manage the access of financial holding companies.
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