May 20, 1993 – Neva Bank, Leningrad
The numbers on the chalkboard made no sense to Ivan.
Lebedev stood before it, a piece of chalk in his hand, explaining the magic of banking to a small audience: Alexei, Ivan, and Kolya. The board was covered with arrows and figures, a visual representation of how money multiplied.
"One million in deposits," Lebedev said, tapping the board. "The central bank requires us to keep twenty percent in reserve. That means we can lend out eight hundred thousand."
Ivan frowned. "And that money—the eight hundred thousand—it leaves the bank?"
"It goes to borrowers. They spend it. The people they pay deposit it back into banks—maybe ours, maybe others. Those banks then lend out eighty percent of that. And so on."
Kolya shook his head. "So one million becomes... what?"
"Five million. Maybe more. It depends on how many times the money circulates." Lebedev drew more arrows. "This is the multiplier effect. This is how banks create money."
Ivan looked at Alexei. "Is this legal?"
"Completely. It's how banking works everywhere."
"But creating money out of nothing?"
"Out of trust. Out of confidence. Out of the assumption that not everyone will want their money back at the same time." Lebedev's eyes gleamed. "It's alchemy. And it's how we'll grow."
Alexei studied the board. In his past life, he had understood fractional reserve banking theoretically. Now, with his own bank, it became visceral. Real.
"What's our current deposit base?"
"One point two million dollars. Growing daily."
"At twenty percent reserve, we can lend about nine hundred sixty thousand."
"Yes. But we need to be careful. The inflation makes everything unpredictable. If we lend in rubles and the ruble collapses, we lose. If we lend in dollars, we're safer—but most of our depositors have dollars now anyway."
"Then we lend in dollars to borrowers who can generate dollars. Exporters. Businesses with hard currency income."
Lebedev nodded. "That's the smart play. Build a dollar loan book, hedge against ruble collapse. But we need to be selective."
"Then we're selective."
The First Loans
That afternoon, Alexei reviewed the first batch of loan applications.
A furniture maker needed twenty thousand dollars to buy Western equipment. A small electronics importer needed fifteen thousand for inventory. A construction company needed thirty thousand to complete a project for a foreign client.
All had dollar income. All had collateral. All had been vetted by Irina.
Alexei approved them all.
By the end of the week, Neva Bank had extended one hundred twenty thousand dollars in loans. The interest rates ranged from eighteen to twenty-four percent—high, but lower than the street, lower than the moneylenders who charged fifty percent or more.
Lebedev calculated the potential income. "If we keep this up, the loan book alone could generate three, four hundred thousand a year in interest. On money that isn't really ours."
"It is ours. It's our depositors'. We're just... renting it."
"Renting. Lending. Creating. The words don't matter. The result does."
May 25, 1993 – Neva Bank, Back Office
The first test came quietly.
A depositor—one of the factory directors—asked to withdraw fifty thousand dollars. Not all at once, but in cash, for a business deal. The request was legitimate, the documentation in order.
Alexei watched as Irina processed the withdrawal. The money was there, in the vault, exactly as it should be. The depositor left satisfied. The bank's reputation grew.
Later, Lebedev reviewed the transaction. "This is the test. If we couldn't meet that withdrawal, word would spread. Trust would collapse. But we could. Because we're not overextended."
"Yet."
"Yet."
"Yet. The temptation will be to lend more, to push the limits, to maximize profit. That's how banks fail."
Alexei nodded. He had seen it before—banks that grew too fast, lent too freely, collapsed when the music stopped. Neva Bank would not be one of them.
"We maintain forty percent reserves. Double the requirement. No exceptions."
"That's conservative."
"Conservative keeps us alive.
May 28, 1993 – Neva Bank, Alexei's Office
The numbers were solid.
One point four million in deposits. Two hundred thousand in loans. Forty percent reserves. The bank was profitable—modestly, but profitably.
Alexei sat alone, reviewing the figures. The fractional reserve system was powerful. Dangerous. But managed carefully, it could fuel their growth for years.
He thought of his grandfather's lessons. Power respects power, not weakness. The bank was power. Not the kind that came from guns or threats, but the kind that came from controlling money. From being essential.
His mother's photograph was in his pocket, as always. He touched it briefly, then turned back to the numbers.
He was moving faster than expected. But he wouldn't let speed compromise safety.
HE was building something that would last.