Why doesn't Westeros have its own bank?

[Hippocras]

Robert being in Tywin's pocket is one of the things that keeps the Lannisters in power, so I'm fairly sure Tywin saw any gold that went to the Iron Throne as an investment in influence, rather than money he expected to see returned to him.

I agree. I think Tywin WANTED the throne in his debt.

[Waters Gate]

Robert being in Tywin's pocket is one of the things that keeps the Lannisters in power, so I'm fairly sure Tywin saw any gold that went to the Iron Throne as an investment in influence, rather than money he expected to see returned to him.

Thats what i think aswell. Thought i guess for Tywin it's a bit of a pitty that he could never capitalize on that obligation by gaining something extra, some title or castles. He wasn't even Roberts hand of the king. Sure a dowry is expected for the Royal mariage between Cersei and Robbert, and with a wife like that you'd want it to be worth something. But asside of that, the rest seems to have been lost with his death, having apparently not lived long enough to reward Tywin with an apt substitute for repayment. Maybe thats why Tywin was not really forthcomming in supplying Cersei with gold, She kinda costed him a lot of money already and probably would have been a waste seeing the inflation happening in the crown lands.

Though Joffrey is in principle a Lannister rather that a stag, we go from the thought that while Tywin was lending money to Robert he was not aware that Jofrey was not a Baratheon? But he gets to know by the time of Roberts death that Joffrey infact is a Lannister. That kinda puts a stick in the wheels of his economic management i guess. Seeing as he's fighting for the rule of his grandchild, there seems few reason to ever really hold Joffrey to the obligation until maybe the kingdom has been firmly pacified for years and the economic climate restored, but even then Tywin is rich enough on himself, it's more power he lusts for. Well he can use the obligation on joffrey as well, but he's getting older himself, i guess he wanted his family on the top and joffrey represents just that.

So from the moment that tywin learns that Robbert is death and that Joffrey is actually a Lannister, all the loans to Robbert have pretty much turned out to be a waste entirely. Since Tywin is at the liberty to dominate much of Westeros it's monetary policy, he's actually managing much of Westeros it's economy behind Cersei and joffrey's back, its likely that in his position and with his wealth of gold he understands the relationship between monetary supply and goods supply at the regional or national level, and is probably used to mannaging the supply of goods in the Westerlands and balancing it with the monetary supply as to control inflation/deflation.

Tywin manages his books quite differently and more competent i guess than Cersei or joffrey, and he considers that the iron throne has it's own accounting which is but a measel thing considering his own wealth and abilety for economic management. So i guess Tywin was kinda not to much concerned about the financial issue's of the iron throne, as while he was leading his army's and managing his realm and the monetary supply to the others he considered the Iron throne to be an incompetent and hollow shell, withough army's or economic decission power to speak of, actually quite inconsequential really, a child to let play a bit while Tywin was doing "the real work". In that sense he did apparently not care to play sugar daddy for the iron throne that being Cersei and joffrey, probably he thought that there insignificant problems did not matter in the least bit and there could be some reason to that.

What he might not have considered, was that the IT would take a loan from the iron bank in bravos and default on that loan aswell. or simply put that the iron throne would have been so stupid to do that. For at that poin the debt of the iron throne actually becomes something of an issue to them, it adds support and possible numbers to his potentil enemy's in the field. Unforseen consequence?

Actually, i think with death of tywin the economy not only of the crownlands but the whole of Westeros will fall a few pegs lower or even collapse, especially with cersei ruling Casterly rock. The gold/silver/money supply of the westerlands aint exactly something to play with if you want stable economic management.

[Kennedy the Keen]

In tPatQ, they state there is a Royal Treasury, but the split the gold into quarters, sending only 1/4 to Braavos, 1/4 to Casterly Rock, and 1/3 to Oldtown, the rest spent on bribes and gifts.

Maybe Oldtown has some kind of bank and Casterly Rock is basically a bank in itself.

[Waters Gate]

It probably flows out of logicly deep trade connections bewteen the westerlands and the reach. The Westerlands have very rugged terrain which i"m pretty sure have a far lower yield in agricultural based goods than the reach, whereas the reach has very high goods production but few mines to get gold/silver/copper, basicly coin from in relation to their production. This most probably makes the reach a great market for Westerlanders to spend their gold and silver and likewise makes the Westerlands a great market for the reachlanders to sell their goods.

Afcourse, given the westerlands domination in gold/silver production, they remain at the source and have a hughe power in monetary policy because of it, but they must mange it on a larger scale to make it more interresting. the westerlands must export its gold to as many markets possible so to make the value of their gold and silver higher. This implies a big trade network which is probably organized by Tywin currently. Should that trade network begin to falter because of Tywins death, then there would be inflation and deflation at various regions in Westeros, fiscal chaos really.

Oldtown is also very old, and might contain many riches from old times. They have had more time to accumulate capital, so they are more likely sitting on a mountain of it, also considering the productional richness and poppulation of its region. Could very well be that oldtown plays its role in the Westerosi economy, there seems to be few know-how on it at the iron throne apparently. With the reach being so productionally rich, and the Westerlands being so rich in gold, there seems reason to the idea that they dominate much of Westeros it's economy toghether.

[Aryss]

Many historical medieval societies did not have there own banks, in the medieval and early modern period it would depend on the economic development of the society and Westeros is still in a very feudal state.

For example Edward I (English King, conquered Wales, and Scotland for a time used Italian bankers, the Riccardi of Lucca (there is a old book on it by Princeton University Press if you would like to google it))

Edward III (perhaps the greatest of the conquering English Kings I seem to remember financed wars through trade deals of English wool, trade goods with a proportion of taxes to Dutch merchants, not through an English bank)

Often in medieval societies when seeking to finance wars, you have to look further a field that the subjects you can tax at will anyway so even if there had been a bank in Westeros the use of a foreign bank would be plausible

[Waters Gate]

Edward III (perhaps the greatest of the conquering English Kings I seem to remember financed wars through trade deals of English wool, trade goods with a proportion of taxes to Dutch merchants, not through an English bank)

The reason was that was that England had an economy that had few variation in production and few riches, produced tonnes of wool though of good quality, and had Flanders not so far which was quite willing to buy up the wool for cloth production as the rich fertile area's of flanders could support lots of labour. As such a lot of money was to be made playing the middle man, buying the wool cheap in England where there was less of a market for it and bringing it to Flanders where there was a hughe market for it and traders would pay a very good price.

[Aryss]

I am pretty sure Edward III used English wool to effectively guarantee loan financing by providing a security, this way a large sum of money could be delivered into the English coffers to finance the conquest of France without direct taxation of the nobles thus alienating them exactly when you need their support

However my point remains that it was not unusual for monarchs to use international financing methods for wars

[Cubarey]

"Edit: Actually there is legal tender, Tyrion signs to debt when he joins the second sons. Not sure if they use it in Westeros, but quite possible. One question one can ask here though is if the debt papers are actually tradable."

If the middle ages are a parrallel theen yes but at a severe discount. Discount would be determind by the likelihood of payment and the distance.

In middle ages the first banking transactions were facilitated by networks of merchants who would honor their fellow merchants IOU. It's much easier to carry a note from Merchant X that asks the bearer to receive Y amount then actually bringing along that amount in metal coins.

As to why there are no banks in Westeroes or why the Kings deal with Bravoosi Bank, it has to do with two related matters. The amount of gold involved means there would be very few sources for the amount of loans that the King needs. The second reason deals with why the Lannisters are a rarity. There would be quite a temptation to find the Noble Banker had committed treason. A treason charge comes with losing all your property including debts owed to you. So few Nobles are going to be willing to loan the Crown large sums. Now the Lannisters are a bit different in that they are mighty bright. King is hardly going to call for the head of a Lannister when he is married to one and "his children" are half-Lannisters. Indeed, it might be argued that one of the inducements which Purcelle would have made to Robert to marry Cerci would have been that his in-laws would be a ready source of loans.

As Aryss said it was not unusual to use international sources, the threat of being named a traitor or having a pogrom called (if the banker were Jewish) was simply to great for many domestic bankers to risk large loans to a Monarch. And as the Iron Bank shows foreign lenders had ways to insure that no reasonable Monarch would renege on a loa. They could simply retaliate by calling in loans or refusing to offer credit to domestic followers making a point to explain that the King's dishonesty was at fault. Problem is that Cerci is simply ignorent about how these things work and no one was left with the balls to inform her that screwing the Iron Bank was a really bad idea.

[bloody_mummer]

Tywin acts as the de facto bank in Westeros. On Robert's death, Tywin's extensive loans to the IT became a loss. They will never be repaid. Baratheons will not repay and Joff identifies as a Lannister, so why would he pay himself. The money Tywin "loaned" to Robert was essentially an investment in the IT itself. By loaning ht emoney, he retained and expanded his family's power and influence. With the current state of affairs, the debt has essentially been written off.

[Waters Gate]

The money Tywin "loaned" to Robert was essentially an investment in the IT itself. By loaning ht emoney, he retained and expanded his family's power and influence.

How did he expand his family's power and influence with these loans?

[Cubarey]

"Joff identifies as a Lannister, so why would he pay himself. "

Actually he identifies at best as a Barratheon/Lannister he makes comments about how his father conqured the Kingdom while Tywin hid in his Castle. Further, Joff would not be paying himself he would not ever inherit Casterly Rock, It would go to Jaime (if he ever left the Kingsguard) tyrian or another direct Lannister male descendant. As such the debt wouls still be owed.

[bloody_mummer]

How did he expand his family's power and influence with these loans?

The same way China has influence on US. Roberts IT was dependent on Lannisters for money.

[Waters Gate]

The same way China has influence on US. Roberts IT was dependent on Lannisters for money

??

China has a mountain of US money yes, but it doesn't have influence on the USA by say just giving it back unconditionally.

Tywin doesn't gain influence for being Robberts Sugar daddy, or atleast he's not capitalizing on it. He only gains with those loans to Robbert if he manages to gain something from Robbert for it, and he never did. tywin never got any special position or title as a reward for it.

[Sages]

This may be a stupid question, and have a really simple explanation that i missed along my understanding. It strikes me as odd that King's Landing has to turn to a bank on a different continent for financial matters like loans and safekeeping of money. I know Westeros and Essos are heavily linked through trade, but wouldn't it be more convenient for the master of coin to deal with a bank in the same region?

The only thing I can think of is that a Westerosi King would trust the safekeeping of money more from a place where they have no vested interest in who was ruling from a political standpoint as it wouldn't affect them in anyway, and therefore would be no risk of trying to dethrone them and join another cause (unless of course debts are not being payed).

I think one of the reasons we are not seeing an official "Bank Of Westeros" is because of the feudal system. Whereas in Essos you are not bound by honor or oath to this or do that. In Tyrion's chapter Inkpots says something to the effect of, we write our promises down on paper. Where it seems like westeros works more on an honor system.

In my personal opinion it would be hard to function as a true bank and settle outstanding debts when you are all beholden to a king that expects political favors and regularly assigns his servants menial tasks on a whim.

Remember robert visits Ned in winterfell. I think its stated that he brings a large part of the court with him. That's a huge expense, that I expect won;t be recovered. And I suspect these kind of inconveniences are common places for westerosi lords. Add to the fact that the people with the money (nobility) looks down on the merchant class or anyone that's not in their own class. And you have a very bad environment in which to conduct good business.

Essos is the complete opposite. The economic climate in Essos is much better and the political climate is trade friendly. I believe that Magister Illyrio tells Tyrion that should a crop fail, they execute the prince and select a new one from among the royal families.

[Mad Monkey]

??

China has a mountain of US money yes, but it doesn't have influence on the USA by say just giving it back unconditionally.

Tywin doesn't gain influence for being Robberts Sugar daddy, or atleast he's not capitalizing on it. He only gains with those loans to Robbert if he manages to gain something from Robbert for it, and he never did. tywin never got any special position or title as a reward for it.

Tywin had his hand so far up Robert's ass even Ned heard Tywin's voice whenever Robert spoke. Notice how many officials in KL are from the Westerlands? Notice how Robert's own squire is a Lannister? Remember when Robert didn't even wait for Jon Arryn -- his mentor and the man who saved him from the Mad King -- to be lowered into his grave before offering his titles and authority to Jaime Lannister instead of Arryn's own son? Sure, Tywin didn't get anything for himself but House Lannister's influence over Robert is fairly high. Now, I don't think it's safe to attribute all that to lending; a lot of that is because Robert's queen is a Lannister. But Tywin definitely capitalizes on his influence over Robert.

[bloody_mummer]

??

China has a mountain of US money yes, but it doesn't have influence on the USA by say just giving it back unconditionally.

Tywin doesn't gain influence for being Robberts Sugar daddy, or atleast he's not capitalizing on it. He only gains with those loans to Robbert if he manages to gain something from Robbert for it, and he never did. tywin never got any special position or title as a reward for it.

Yes he does. In both cases both the lender and borrower know that the borrower is going to require significant future loans and that the only person/entity that can provide it is the lender. If borrower doesn't dance to lender's tune, borrowers credit dries up and no more loans.

[bloody_mummer]

Also, aside from the heads of the major households, I do not think there is enough demand for banking services in Westeros to warrant one. Westeros has few "cities" proper like Essos. The power centers are the castles run by lords, each owing allegiance to a higher lord in the pecking order. In exchange for an oath of fealty, each house lord is responsible for providing for the welfare of his subjects. Thus, when the minor lord complains to Bran about his walls crumbling, Bran does not give him gold to fix it; he allows them to use some of Winterfell's masons. Likewise, most "taxes" are paid by the lower lords by shipping a portion of their excess farm produce "up the ladder." This is why Highgarden is able to feed KL's.