Could the Iron Bank collapse?

[Canon Claude]

If there's one thing that we've been assured of it's that the Iron Bank endures through all the civil strife and corruption that Westeros has ever waged. Kings tremble at the thought of the Bank turning on them. 

So given GRRM's nature of taking a given fact and turning it on us, could we see the Iron Bank collapse?

Theres only so much money that a bank can lend out, and then on top of that, the Bank is spending lots more gold to get their investments back. So how much is too far? Could the Iron Bank overstretch its resources? Or will it endure and just write off all the money it sunk into Westeros when it's clear that the Others have brought about a new dark age for that whole continent?

[Floki of the Ironborn]

I'm sure we'll see a lot of things collapse in the face of the Others, but I'm positive that the Iron Bank won't be one of them.

[fire&blood]

Iron Throne, Iron Bank - maybe if one falls so will the other? Irony being that it'll fall as a result of The Others

[The Commentator]

I would ordinarily say unrest and turmoil are bad for the banking business but the Iron Bank exists in a fictional world.  What happened to the savings accounts of the Reynes and the Tarbecks when Tywin kindly put the entire family to rest?  In the States, when assets exists and there are no heirs it goes to the GOV.  I don't think that happens over there.  The bank just absorbs the funds into its own profits.  For that matter, what happened to the savings of the Starks when Team TWR took down the wolves during the R-W?  And the Darklin savings account after they got the capital punishment?  

The Wot5k = very bad for the banking business.  Burned crops and the labor force playing soldier don't generate GDP.  

Stannis and Roose fighting over the North doesn't help.  Roose increased his wealth and could have deposited some of it in his own account with the bank.  Daddy Walder gave him silver and he now owns all of the Stark real estate properties.  

Interrupting the slave trade doesn't help.  Although the non-human assets of the deceased slave masters deposited in the banks were almost certainly absorbed in their quarterly profits.  

The short answer is, yes the bank can fail but we need to keep in mind that the Iron Bank operates in that world with very different rules.  Maybe they have banking regulations, maybe they don't.  ?

Have you ever wondered what happens to the bank accounts of the wealthy deceased with no heirs?  I think it's obvious how the faceless men can be useful to the bank.  Maybe Arya murdered an innocent old insurance man at the bar after all.  All his money went_where?  

[rotting sea cow]

1 hour ago, Canon Claude said:

If there's one thing that we've been assured of it's that the Iron Bank endures through all the civil strife and corruption that Westeros has ever waged. Kings tremble at the thought of the Bank turning on them. 

So given GRRM's nature of taking a given fact and turning it on us, could we see the Iron Bank collapse?

Theres only so much money that a bank can lend out, and then on top of that, the Bank is spending lots more gold to get their investments back. So how much is too far? Could the Iron Bank overstretch its resources? Or will it endure and just write off all the money it sunk into Westeros when it's clear that the Others have brought about a new dark age for that whole continent?

The debts of the crown to the Iron Bank are not as large as it seems at first. Of the six millions of dragons, three are owned to the Lannisters,  about a million to the Faith and the rest to Tyrells, Tyrosh and Iron Bank. One million seems to be a good guess.

It is possible that during tWo5K the debts increased, but it is unlikely it is a threat to the finances of the IB. I think it is a matter of prestige as well as increasing concerns about the stability of Westeros as a united kingdom. Maybe they just want to get their money back before the Iron Throne collapses.

[Scorpion92]

Well, I expect Braavos to go underwater during Long Night, there are hints of it in Arya's chapters.

I expect Braavosi refugees to sail to Westeros, more specifically, to the Vale. That biggest river that cuts through the Vale is very close to Braavos. I also believe population fleeing from the North away from the Others will settle down in the Vale as well, and that is where Littlefinger's stocking of food and Sansa's Stark aspect will come into play.

If Iron Bank flees drowning Braavos with some amount of money, I believe that Westeros is closest where they will flee since I expect other Free Cities to be devastated as well (either by Long Night cataclysm or Dany and Dothrakis).

[The Great and Mighty Poo]

Nothing is too big to fail.

[Good Guy Garlan]

It's the Iron Bank, not the Lehman Brothers. 

The Bank's position regarding Westeros is less than ideal. The impending apocalypse aside, they're banking (pardon the pun) on Stannis winning the throne and paying them back with interests, most likely from the coffers of Casterly Rock, Highgarden, the Twins, the Dreadfort, etc. 

But let's be real, Stannis ain't gonna win no throne in the near future. Cersei won't pay them back, Aegon's got another main investor and Euron is batshit insane. Meaning, the only horse they could back in this race is Dany, but she's got dragons and Braavos are not bout that life. 

[Nevets]

Given that the Faith barely blinked an eye while forgiving their debt (which was about 1 m dragons, about the size of the IB's debt) in exchange for reinstating the Faith Militant, I expect that the IB can survive writing off the Crown's debt.  However, given that they are currently playing hardball with private borrowers, it is possible that to keep the peace in Westeros, whoever winds up in charge may be forced to come to some sort of arrangement with the IB for at least a partial payment.  Assuming there is anything left to pay with at the end of the story, that is. 

[leonardof]

I can see the Iron Bank collapsing if:

1. They stop receiving the payments. In the real world, banks collapse when they lend too much and don't receive it back. On the one hand, the Iron Bank doesn't have a safety net like modern legislation (usually) imposes, but in the other the Iron Bank is known for effectively receiving their due. The War of the Five Kings seems to have been a bad business for them, but we don't have any information about the Iron Bank having overstretched its funds by lending to the Iron Throne.
2. Civilization collapses. That is a serious possibility with the coming of the Others, but there seems to be a general consensus that Westeros was striken harder than Essos during the Long Night, so it might be that Braavos and the Iron Bank will be quite fine after the Others are defeated.

[Aline de Gavrillac]

15 hours ago, Widowmaker 811 said:

Have you ever wondered what happens to the bank accounts of the wealthy deceased with no heirs?  I think it's obvious how the faceless men can be useful to the bank.  Maybe Arya murdered an innocent old insurance man at the bar after all.  All his money went_where?  

That's a clever way to make money.  Appropriate the accounts of the dead.  Recession?  No, problem just send your assassins to knock off a few rich senior citizens with no heirs.  The heirs can die too if need be.

[rotting sea cow]

16 hours ago, Scorpion92 said:

Well, I expect Braavos to go underwater during Long Night, there are hints of it in Arya's chapters.

Really? I missed that, could you please post these hints?

16 hours ago, Scorpion92 said:

I expect Braavosi refugees to sail to Westeros, more specifically, to the Vale. That biggest river that cuts through the Vale is very close to Braavos. I also believe population fleeing from the North away from the Others will settle down in the Vale as well, and that is where Littlefinger's stocking of food and Sansa's Stark aspect will come into play.

Why not the Braavosi just run for the hills in their hinterlands?

15 hours ago, Good Guy Garlan said:

The Bank's position regarding Westeros is less than ideal. The impending apocalypse aside, they're banking (pardon the pun) on Stannis winning the throne and paying them back with interests, most likely from the coffers of Casterly Rock, Highgarden, the Twins, the Dreadfort, etc. 

But let's be real, Stannis ain't gonna win no throne in the near future. Cersei won't pay them back, Aegon's got another main investor and Euron is batshit insane. Meaning, the only horse they could back in this race is Dany, but she's got dragons and Braavos are not bout that life. 

I think there is more than money involved in the support of the IB to Stannis. The debt is not supposedly that large, unless Littlefinger made some further mischief with the accounting and the debt is actually huge. 

17 hours ago, Widowmaker 811 said:

Have you ever wondered what happens to the bank accounts of the wealthy deceased with no heirs?  I think it's obvious how the faceless men can be useful to the bank.  Maybe Arya murdered an innocent old insurance man at the bar after all.  All his money went_where?  

Nobody ever said that the FM do not murder innocent people. You just have to pay them and what they charge is always expensive, whether you are a slave or a king.

 

[Protagoras]

Of course they can - but I doubt the crisis in Westeros will be enough. I assume they have most of their capital, deptors and (most importantly) those that have loaned out money to the Iron bank ie have money on an account.

Banks whole idea is the loan out more money that they can cover. They do not need gold to cover it 100%. Indeed, such would limit the effect of the bank. Instead, they gamble on that people will trust the bank, trut their paper money and not run to the bank to get their gold. Because if they did, the bank would collapse. That this sometimes happen was the reason to create a system of a central bank in the first place. The Iron bank should therefore have significant amounts of gold, but even more debts out.

So, clearly - by backing Robert and later Stannis (Granted, the sums he need are (most likely) a fraction of Roberts debt so it make sense to support him so they can recover their losses), the banks have made a poor investment in Westeros. People won´t it pay back. But it is just that - an investment. Sure, it will be a loss, but the banks origin in Essos should mean that they are not significant. The the eventual panic that some Essosi might get, should be possible to cover. After all, why should Essos care about the chaos in Westeros. 

[The Commentator]

3 hours ago, rotting sea cow said:

Nobody ever said that the FM do not murder innocent people. You just have to pay them and what they charge is always expensive, whether you are a slave or a king.

They give discounts to their best customer.  Besides, if they own shares in the bank it is in their interest to bump off a few of the rich customers.  They take possession of the accounts and do not have to pay interests.  Win-win for them.  

[1000th Lord Commander]

I very much doubt that the Iron Banks only investments are in Westreros. Far more likely is that they have loans and investments playing out across the world. Given that assumption, Westeros could collapse into anarchy and the Iron Bank wouldn't collapse.

But  there are parts of our story that don't take place in Westeros. I wonder how many of Dany's enemies had accounts with the Iron Bank, how much gold she has taken that belongs to the bank. And yet even with that, I doubt the bank is collapsing anytime soon. Not unless she tramples the Free Cities under her dainty sandaled feet.

[rotting sea cow]

1 hour ago, 1000th Lord Commander said:

I very much doubt that the Iron Banks only investments are in Westreros. Far more likely is that they have loans and investments playing out across the world. Given that assumption, Westeros could collapse into anarchy and the Iron Bank wouldn't collapse.

Indeed. One would guess that most investments are in the Free Cities. Also the IT is not the only client in Westeros and the IB is pressuring the IT by recalling merchants and nobles debts.

1 hour ago, 1000th Lord Commander said:

But  there are parts of our story that don't take place in Westeros. I wonder how many of Dany's enemies had accounts with the Iron Bank, how much gold she has taken that belongs to the bank.

Very little so far. Braavos doesn't trade with Slaver's Bay.

1 hour ago, 1000th Lord Commander said:

And yet even with that, I doubt the bank is collapsing anytime soon. Not unless she tramples the Free Cities under her dainty sandaled feet.

which is bound to happen.

[leonardof]

On 10/04/2017 at 5:20 PM, Scorpion92 said:

Well, I expect Braavos to go underwater during Long Night, there are hints of it in Arya's chapters. [...]

Really? That would be certainly interesting, even if I'm not sure the books would be able to cover the unfoldings of the migration. On the other hand, I always thought the sea level would be more likely to lower during the Long Night, like in the real world Ice Age.

[John Doe]

Every bank can collapse, so yeah. I wonder if their reserves are as large as everyone seems to think they are. 

[BRANDON GREYSTARK]

Yes . If the bank cannot collect on it's debts ,collapse of civilization .

[Lord Vance II]

CAN it? Of course. But will it collapse in the story outside an act of the gods? Probably not.

I don't think we've ever been lead to believe the debt owed by Westeros was too huge a sum. The amount, maybe 3 million dragons (not trying to argue the number) is in a vacuum. But I can't imagine it's that much money (comparatively) to THE bank in the world. 

The amount of money the Iron Bank has at it's disposal is probably absurd, especially considering how long they've been at it.