How would a bank work in Westeros?

[The Wolves]

So I was thinking about Westeros having a bank and wondering how it would work and who would be in charge of it and how it would affect Westeros' economy and the nobility so here are some questions....

How would a bank work in Westeros? Would the Lannisters control it? Could the other Great Houses finance a bank? Etc...

[Bright Blue Eyes]

Westeros got a whole bunch of banks already. House Lannister is one of the biggest, but far from the only ones.

[OldGimletEye]

A lot would depend on whether Westeros is advanced enough to practice fractional reserve banking. Banks in medieval Europe basically started out as places where you stored your gold. The bank would then basically charge you a fee for the gold storage. A bit later bankers started to realize that they could lend some of the gold out because not all of their customers would demand their gold deposits at the same time. By lending out most of their gold reserves, and only holding a fraction of their gold holdings to meet their customers demands, banks became much more profitable. Also, fractional reserve banking helped to increase the money supply, which was helpful when their was a high demand for bullion and coins. Although fractional reserve banking helped banks to become much more profitable, the downside was that bank always faced the possibility of having a run on their assets, meaning that customers started demanding more gold than the bank had on hand.

As Banks became more advanced they made a lot of money by discounting commercial paper, like Bills of Exchange and so forth.

Presumably anyone in Westeros could start a Bank so long as they could get customers to store their gold and sliver with them. In Europe, many of the first bankers were gold and silver smiths.

[Nyrhex]

Cersei contemplates establishing a bank based on Lannister gold in Lannisport. Currently the great houses work as a sort of bank themselves. The difference between feudal, industrial and merchant class is only when it comes to "old money" prestige versus "new money". The Lannisters habe a near monopoly on gold production, while Littlefinger is using the crown's tax money to invest and increase the crown's revenue.

He bought wagons, shops, ships, houses. He bought grain when it was plentiful and sold bread when it was scarce. He bought wool from the north and linen from the south and lace from Lys, stored it, moved it, dyed it, sold it.

The Lannisters have a merchant-class cadet branch in the Lannisport Lannisters. The Arryns with the Gulltown Arryns. The Starks had the Greystarks before that line rebelled and was extinguished, and the new lords of WH have a near mythic loyalty to the Winterfell Starks.

The crown is 6 million in debt in AGOT, half to the Lannisters, and half to the Tyrells, the Faith, Tyroshi trade cartells and the IB of Braavos combined. The IB may not be the single largest source of loans to the crown, but that may be the fact that Tywin as Robert's father in law set him with good rates. The IB's loans are felt strongly by Westerosi lords after the IB recalls all loans.

A Bank of Westeros would need to be under the authority of the crown. It would likely be in the capital, under the master of coin, who already acts very much like a bank in all but name. Remember that the Antler Men were mostly of the merchant class who owed money to the crown from LF's loans.

[Bright Blue Eyes]

Presumably anyone in Westeros could start a Bank so long as they could get customers to store their gold and sliver with them. In Europe, many of the first bankers were gold and silver smiths.

Don't forget the templars.

[OldGimletEye]

Don't forget the templars.

You are right!

[OldGimletEye]

The Lannisters habe a near monopoly on gold production, while Littlefinger is using the crown's tax money to invest and increase the crown's revenue.

The Lannisters with their apparent endless supply of gold would seem to have important implications. I would suppose “Lannister Bank” would never face the possibly of having a liquidity crises. Accordingly, it could probably afford to lend at lower interest than most banks and thereby easily obtain a monopoly in banking.

[aryagonnakill#2]

A bank in Westeros that had some sort of tie to the Iron Throne would be a great benefit to westeros. First of all it would be able to reduce if not eliminate the leverage that foreign lenders currently have in westeros. Second it would help make certain lords and rich merchants even richer, while helping somewhat poorer people such as ship captains become rich.