How is Westeros going to pay off their massive debts?

[Trogdor Targaryen]

14 hours ago, The Great and Mighty Poo said:

Slavers bay isn't closer then westeros....

 

Slavers Bay

Bravos

Ok,  I still stand by what I said,  though.  It may not be physically closer but it is in the same continent and also happens to be a culture that represents the opposite of what Braavos stands for. I believe a conquered slavers bay would be of greater value to them than a famished westeros which is potentially full of ice zombies. Yes,  westeros may be more accessible and bigger/more resources than slavers bay but I so not believe that will be all the factors of reasoning. 

[Wolf_Blood]

How about the Castamere mines? Couldn't they be reopened and used?

[Protagoras]

By some creative thinking.

The crown is millions in debt - sure. But that debt is tied to the Baratheon regime and at best (if we assume a house responsibilty) to House Baratheon personally. If the Baratheons loses some assets (like the throne) the debt is not transferred away from them.

So - assuming a Targaryen restoration (yes, I will assume this - deal with it!) the debt doesn´t really exist anymore. Remember that this is not a democracy - debts are personal. The first move therefore is to simply state "If you think the usurper owns you money - take the claim to his house and his family. The throne are not responsible for those debts - indeed, that you did support our enemies with money is something working against a future relation". In addition, if we are going by modern values, I am both a socialist and a state autharian - I think nationalization done by a democracy is always legal and that such a state have the right to strip any asset of an individual or another state without compensation. I find TTIP and ISDS-rules pure bullshit and a threat to democracy.

Now, not everyone in Westeros will accept this - but what can they do when the Targaryens have beaten the realm into submission? The Iron bank not only supported Robert, but later Stannis (instead of say going to Mereen or talk to Aegon). But only did they support our enemies, they have the audacity to demand repayments for debts not ours. The bank really has nothing to threaten with, since they have already done what they threaten with - namely assisting a new regime and they have already acted with ill faith when they didn´t show up until the war was won - demanding money!

Lannisters also will have no money back. Either Tyrion will sign the debt away in order to get legal forgiveness for the murder of Tywin or the Lannisters in general will do it - to offer something for an end of hostilities. and again - why should we pay another mans debts. They should be lucky if they keep their heads for what they did and so should the rest of the Usurper´s dogs.

What more - the faith. Well, during the HS regime, the church have acted out of their role as spiritual guidance, believing themselves to be rules in place of kings. This is a capital offence and the faith should be forced to choose between debt removal & submission or Maegor 2.0.

Finally, the Tyrells - its too hard to say what and how they will act in the future, but most likely they will be eager to gain favor with the new ruler.

[Nevets]

The great majority of the debt is owed to one of three entities: the Church, the Lannisters, and the Iron Bank, with bits and pieces owed to other outfits.  

The Church already forgave its debt so that it could get the Faith Militant back.  They're not getting paid.

The Lannisters aren't getting paid.  Either an opponent like the Targaryens comes along, in which case they will be told to "stuff it", or someone they support will win out, in which case they will forgive the debt, and possibly continue funding.

So that leaves the IB and the other bits and pieces.  Unless the country is completely devastated by the Others and Dance of Dragons 2.0, the Crown can probably collect sufficient revenue to pay it back.   If the country is devastated, repayment is likely to be the least of their problems, and the IB and others will be fully aware of this fact and probably hold off for the time being so long as they are not ignored (as per @JCRB's Honeypot).

[Jaak]

14 hours ago, CJ McLannister said:

The source of the debt is a little unclear.  There was really only the one war, and I don't know that there was evidence of a huge naval build-up or anything that could quickly bankrupt a kingdom.  I don't recall Robert building any new castles or monuments to his own greatness.  They certainly didn't spend much improving infrastructure.  We know that Robert was generous.  I think he (and Jon) tried to keep the peace by spending gold and reducing tax burdens on potentially rebellious regions.  I think the court was pretty wasteful too, but not wasteful enough to run up that kind of debt.

Whatever the cause, Ned's conclusion that Jon was mismanaging things is probably accurate.

Another supportive fact is the number that Crown incomes were 10 times bigger than under Petyr's embattled predecessor.

They are bigger than ever before, but I don´ t think Petyr increased revenues 10 times over Tywin's level. Rather, a likely cause is that Robert had decreased crown revenues by giving away income streams - tax breaks, giving away Crown lands etc.

Which could have worked if Robert had ran a cheap court like Jon or Eddard would have done - but Robert kept spending as if he still had Aerys' income.

[desire]

Brass merchant 

[Maester of Valyria]

16 hours ago, Wolf_Blood said:

How about the Castamere mines? Couldn't they be reopened and used?

I've always thought that the Castamere and Tarbeck mines could be reopened: I'm slightly surprised Tywin didn't do that already.

 

16 hours ago, Protagoras said:

Now, not everyone in Westeros will accept this - but what can they do when the Targaryens have beaten the realm into submission? The Iron bank not only supported Robert, but later Stannis (instead of say going to Mereen or talk to Aegon). But only did they support our enemies, they have the audacity to demand repayments for debts not ours. The bank really has nothing to threaten with, since they have already done what they threaten with - namely assisting a new regime and they have already acted with ill faith when they didn´t show up until the war was won - demanding money!

While I get the feeling that the Iron Bank is prepared to allow (at least significant) debtors to delay repayments as long as they commit to paying up in the future, they do not have 'nothing to threaten with'. Even without a rival to the throne to support against you, the Bank's willingness to hire assassins is well-known...

[Protagoras]

12 minutes ago, Maester of Valyria said:

I've always thought that the Castamere and Tarbeck mines could be reopened: I'm slightly surprised Tywin didn't do that already.

 

While I get the feeling that the Iron Bank is prepared to allow (at least significant) debtors to delay repayments as long as they commit to paying up in the future, they do not have 'nothing to threaten with'. Even without a rival to the throne to support against you, the Bank's willingness to hire assassins is well-known...

But the bank is already doing what they threaten to do. You can´t torture someone and then say "Look - we will torture you even worse if you don´t pay". I have already been tortured. I will feel I have nothing to lose. 

[Maester of Valyria]

1 minute ago, Protagoras said:

But the bank is already doing what they threaten to do. You can´t torture someone and then say "Look - we will torture you even worse if you don´t pay". I have already been tortured. I will feel I have nothing to lose. 

To the Lannisters, yes, they're supporting Stannis. If Dany or some other claimant eventually ascends to the throne and begins repairing their war-torn realm, there won't be another claimant for the Bank to support in the event that the new ruler defaults on their loans.

As for the torture bit: tell that to Reek...

[Protagoras]

6 hours ago, Maester of Valyria said:

To the Lannisters, yes, they're supporting Stannis. If Dany or some other claimant eventually ascends to the throne and begins repairing their war-torn realm, there won't be another claimant for the Bank to support in the event that the new ruler defaults on their loans.

As for the torture bit: tell that to Reek...

Ok, fair enough - The Iron bank can certainly make threats. Threats that will be hard to just ignore.

But what kind of principle of justice can they even work from here? What will be their legal argument to claim that, say Daenerys, should pay back the Baratheon debts owned by the Iron bank? How can they even work this angle? The debt is not hers, nor her family´s, the bank supported the false king Robert and later the false king Stannis. Should Daenerys pay Stannis debt too? Why not everyones debt - the farmer who took a loan to build a mill or the merchant who took a loan to finance a trade venture? There is as much connection there as there is in this case. Is the Iron bank in business of forcing pirates to pay for insurances on items they have stolen too?

If the Iron bank say "Give us money or we send assassins" make them no different than thugs or terrorists who say "Give us X or Y happens" and they have as much right to the money. The correct counterresponse would be to make a official protest to the Sealord of Braavos and, if that fails, declare war on Braavos and let dragonfire rain on the city until they reconsider. 

[CJ McLannister]

Before they start hiring assassins, the Iron Bank's primary weapon would be to, essentially, downgrade Westeros' credit rating.  They stop lending money to the crown or any Westerosi entity.  If Westeros can be self-sufficient, then that's not really a problem.  I don't get the sense that the financial system is all that complicated, so trade probably wouldn't be impeded, but any kind of catastrophic event (long winter, war, crop failure, ice zombie invasion) would put the kingdom in some difficulty.

The bottom line is that whoever wins the crown should probably pay them back, but I don't think that there's any great urgency to it and I don't see the Iron Bank implementing any egregious terms.

[Maester of Valyria]

23 hours ago, Protagoras said:

Ok, fair enough - The Iron bank can certainly make threats. Threats that will be hard to just ignore.

But what kind of principle of justice can they even work from here? What will be their legal argument to claim that, say Daenerys, should pay back the Baratheon debts owned by the Iron bank? How can they even work this angle? The debt is not hers, nor her family´s, the bank supported the false king Robert and later the false king Stannis. Should Daenerys pay Stannis debt too? Why not everyones debt - the farmer who took a loan to build a mill or the merchant who took a loan to finance a trade venture? There is as much connection there as there is in this case. Is the Iron bank in business of forcing pirates to pay for insurances on items they have stolen too?

If the Iron bank say "Give us money or we send assassins" make them no different than thugs or terrorists who say "Give us X or Y happens" and they have as much right to the money. The correct counterresponse would be to make a official protest to the Sealord of Braavos and, if that fails, declare war on Braavos and let dragonfire rain on the city until they reconsider. 

They could make the case that the debt belongs to the Iron Throne and not to whichever House sits it:

Quote

Could the Lannisters truly be so foolish? "You cannot mean to hold Stannis responsible for his brother's debts."

 

"The debts belong to the Iron Throne," Tycho declared, "and whosoever sits on that chair must pay them. Since young King Tommen and his counsellors have become so obdurate, we mean to broach the subject with King Stannis. Should he prove himself more worthy of our trust, it would of course be our great pleasure to lend him whatever help he needs."

However, Stannis is of course heir to Robert, who ran up these huge debts in the first place. The Bank might still claim that the debts are tied to the Throne (which would obviously be their preferred outcome, as that gives the debts more chance of being paid off) but Dany/Aegon/Tyrion/Sansa/Other/other (delete according to taste) may not see it like that. The Bank may be prepared to write off a certain portion of the money it's owed, although that would set a dangerous precedent for it, as long as the person who eventually ends up on the world's most uncomfortable chair guarantees that they'll pay all future debts.

War on Braavos, even with dragons, would NOT be a smart move: aside from the Titan and the navy, the Faceless Men really don't like dragons...

 

22 hours ago, CJ McLannister said:

Before they start hiring assassins, the Iron Bank's primary weapon would be to, essentially, downgrade Westeros' credit rating.  They stop lending money to the crown or any Westerosi entity.  If Westeros can be self-sufficient, then that's not really a problem.  I don't get the sense that the financial system is all that complicated, so trade probably wouldn't be impeded, but any kind of catastrophic event (long winter, war, crop failure, ice zombie invasion) would put the kingdom in some difficulty.

The bottom line is that whoever wins the crown should probably pay them back, but I don't think that there's any great urgency to it and I don't see the Iron Bank implementing any egregious terms.

That's a very interesting idea, although since Westeros doesn't seem to have much debt to Essos apart from the Braavosi and Tyroshi, that might not affect it so much. In addition, any intelligent banker knows that if you have a debtor who will never dig their way out of the hole, then debt relief is the only hope for recouping at least some of your losses: otherwise you end up getting nothing back, ever (which is happening now in Greece).

I agree with that last: the Bank has always seemed reasonable, and I wouldn't be surprised if it suspended all payments for a certain period and lent a good deal more to Westeros to allow the continent to get back on its feet, in exchange for the debt being recognised and a commitment to pay in the future expressed.

[Greg B]

Dionysius of Syracuse gathered up all the gold coins that said "one drachma" and restamped them to say "two drachmas." Presumably the Iron Bank understands that the sovereign controls the value of its currency and prices in the risk of devaluation when they purchase sovereign debt. I mean, they're so smart and all.

[Scorpion92]

It will not matter in the end, because I believe Braavos will be flooded so bad during Long Night that neither Iron Bank nor Faceless Men (theoretically the muscle of the Bank) will survive, just like the Iron Throne and King's Landing. The drowned Braavosi buildings in Arya's chapters are huge foreshadowings I think.

It is my personal belief and theory that remaining Braavosi survivors will board ships and sail towards Westeros to find new home, still possessing and armed with their knowledge of naval supremacy, banking system and technology, superior political and social foundations in general which is ahead of that in Westeros.

There is only one destination close to would-be destroyed city that has already been linked with Braavosi - White Harbor, which will be awarded to Davos Seaworth for his service to Jon (Manderlys will be deposed in the upcoming book, and the North will be significantly changed politically under Jon in face of upcoming winter but it is an essay for other day).

After Battle of the Dawn is fought and spring arrives, I expect Braavosi survivors to settle down in White Harbor and share their knowledge, with Davos as elected mayor of the city (hello new political and social system) and appointed Grand Admiral of Westerosi Navy (in other words, Davos will be in charge of all navy in Westeros by the end of the books, "Seaworth" just screams that).

Tyrion will also be one of the biggest parts of new Westerosi government, and I think he will implement some banking system into the realm and establish a new financial system with national bank, funded and controlled by government, just like in real life every country has its central national bank. He will probably discuss with survived Braavosi bankers to help him implement these ideas since they are now part of the realm too.

[Richard Writhen]

The iron price. Daenerys will kill them all before they can pay their creditors.

[Light a wight tonight]

Double the "Dwarf's Penny" for transactions at brothels. That should pay the debt off in short order.

[WSmith84]

Cut down on swan, heighten the tax on Arbor Gold and remortgage Casterly Rock.

[JLE]

But what happens when Westeros *can't* pay its debts - or won't - to the extent that Braavos itself has no money, only promises, to finance an invasion of Westeros to get it?

"I owe the Bank a thousand, and I don't pay... I have a problem. I owe the bank 100 billion and I don't pay... The bank has a problem".

They will have made out loans to others, on the strength of the promise of Westerosi repayments. If those repayments don't happen, and Braavos finances an army to take over Westeros... then that's still expense for Braavos (in hiring said mercenaries). And they won't necessarily get their money back if it isn't *there* to be got. The Iron Bank itself may be in trouble: especially if pretty much everybody else is also borrowing from them. At some point their vaults are going to be opened and they'll find that there's nothing in there: they have nothing *to* lend except promises, so if its biggest debtors all team up against it, it's in big trouble.

(Which is in fact not far from what happened in many financial bubbles in the past, and no doubt will happen in the future: when a bank that has got "too big to fail" finds out that it is actually over-leveraged and dependent on payments from a debtor who fails to pay up, either because they refuse and run off with the money or because the money simply isn't there.

Littlefinger's plan may not even be to take over Westeros but to bring down the Iron Bank of Braavos itself: after all, aren't his own family Braavosi in origin, and wasn't their personal sigil a stone giant representing the Titan of Braavos? Maybe he has a grudge against the bank and intends to beat it by its own means, namely financial? Historically, this was in fact exactly how King Louis XIV of France brought down his corrupt Finance Minister, Nicolas Fouquet - borrowing so much money off him that he no longer had anything left to lend out or bribe people with, when the corruption charges came against him, in effect out-banking the Bank.)

[Protagoras]

7 hours ago, Maester of Valyria said:

They could make the case that the debt belongs to the Iron Throne and not to whichever House sits it:

However, Stannis is of course heir to Robert, who ran up these huge debts in the first place. The Bank might still claim that the debts are tied to the Throne (which would obviously be their preferred outcome, as that gives the debts more chance of being paid off) but Dany/Aegon/Tyrion/Sansa/Other/other (delete according to taste) may not see it like that. The Bank may be prepared to write off a certain portion of the money it's owed, although that would set a dangerous precedent for it, as long as the person who eventually ends up on the world's most uncomfortable chair guarantees that they'll pay all future debts.

War on Braavos, even with dragons, would NOT be a smart move: aside from the Titan and the navy, the Faceless Men really don't like dragons...

Hmm, interesting.

I would argue though - from a legal perspective - that Stannis and Tommen are payment-candidates simply because they rule from the same claim - one that is based on Robert. In order to do so they accknowledge Robert as king before them and thereby the debt taken in his name. They simply can´t ignore it since their predecessor is the basis for their rule and the signatures are still there to prove what he did.

A Targaryen candidate however does not accept Roberts rule nor use his claim and therefore his debt should be pretty irrelevant as well as his other rulings during that period of time. This situation is more similar to losing your cargo to pirates i.e. a possible risk when doing business. It is simply one thing to claim money from Tommen/Stannis and an entirely different thing to do it from Aegon/Daenerys/Jon (Jon however has another loan to them he (as in Lord commander) needs to pay though so his manouverability would be less).

In addition to this, the bank decided to not seek out a Targaryen candidate and give them a chance to meet their offer but instead seeked Stannis up. Its one thing to give support when its needed in return for something, another to show up when everything is won - demanding money from loans you never took and threaten with assassins (The same reason poor countries today shouldn´t be forced to pay back loans taken by their dictators).

And the war on Braavos makes perfect sense. After all - I as king most likely wont die in such a war but an assassin might kill me. Besides - I have set a precedent myself. They know that next time they try to force a debt (which is harder to logically defend), there will be consequences and with dragons many things are possible despite their technological advantage. In addition - there will be political ramification with the sealord maybe or a blockade on Bravosi traders and goods. Maybe even an public promise to Volantris to support then in whatever endeavour they will do in the future vs Braavos. In short, this can be costly and the king (Who has to pay or suffer assassins) have less to lose with an all-out than Braavos. Its not a smart move for certain but I like the pott odds (Seriously - it the faceless men takes a contract on you - who cares they dont like if your dragons burn their temple to cinders or dragons in general. Their opinion stopped being relevant when they started to work against you).

In short - the Iron bank case to get the money they think the Targaryens will owe is pretty weak if not nonexistant and this should be clear even to the bank itself. Again - Thuggish.

[WSmith84]

11 minutes ago, Protagoras said:

In addition to this, the bank decided to not seek out a Targaryen candidate and give them a chance to meet their offer but instead seeked Stannis up. Its one thing to give support when its needed in return for something, another to show up when everything is won - demanding money from loans you never took and threaten with assassins (The same reason poor countries today shouldn´t be forced to pay back loans taken by their dictators).

To be fair, at the time the Bank was searching for another candidate to pay the debt, Aegon had not yet revealed himself and Daenerys had shown no inclination of leaving Meereen for Westeros. The Bank might have felt it prudent to go to the Baratheon claimant actually fighting for the Throne first; if Stannis wins, all well and good. If not, they can approach Dany later if she makes a move towards Westeros. Or they can discuss terms with Aegon if he lives longer than Stannis. Stannis would seem like the most likely of the three to pay off the Baratheon debt, as well. So it makes sense to go to him first.