Predictions: The Iron Bank

[Nevets]

On 6/24/2021 at 8:45 AM, John Suburbs said:

I think this is what Illyrio is actually up to, and Littlefinger is his agent. With the bank gone, the Braavosi economy collapses, since the iron coin is just a proxy currency backed by the bank's gold. So Illyrio began by bankrolling Petyr's rise to power, then having Petyr borrow the gold from the IB, the faith, the Lannisters, Tyrells etc. Now, he has to do two things:

1) Defeat Stannis. The bank did what it always does when faced with non-payment: if funds another backer. But while this may work in Essos, where anyone can be a triarch or an archon, the Iron Throne is a hereditary post. So you either have to have a legitimate claim to it, or you have to conquer all of the great houses, something it took Aegon the Conqueror three years to do, and he had dragons. So with Stannis gone, it will suddenly become clear to everyone that the bank has no other champion to back. Meanwhile,

2) He puts his own Aegon on the throne. One of his first edicts will be that the debts incurred by murderers and usurpers are their own and not the crown's. 

Now, the stage is set to spring the trap. Much of the gold borrowed by the crown will have been embezzled by Petyr and deposited, guess where, right back into the IB, most likely under hundreds if not thousands of proxy names. All Illyrio has to do is send these people into the bank to withdraw their accounts, spreading the word of the bank's insolvency to any other depositor who will listen, and as soon as the bank closes its windows it spurs a panic that can bring the whole thing down in a day, just like the Rogare Bank..

With the bank out of the way and Braavos in economic and social chaos, Pentos can tear up the peace treaty it signed all those years ago, recovering its lost autonomy and allowing rich men like Illyrio to get even richer selling slaves. After that, Petyr can do what he likes with Westeros.

The only wildcard in all of this is Dany.

1.  Braavos uses gold and silver as their currency, just like everyone else.  The only iron coin we have seen is the one Arya has, and that definitely isn't money.  More like a Faceless Man token.

2.  While Littlefinger may wish for Stannis to be gone, he has done nothing to bring it about. The only thing he has done is provide (f)Arya to the Lannisters,, and that plot was in motion well before Stannis set foot in the North.

In any even, Stannis is the Iron Bank's Plan B.  Their plan A is for the Crown to pay their own debt, hence the pressure being placed on the Kings Landing business community, in the hopes that they can put pressure on the Crown.  Nestoris's trip to Stannis may be pressure as well. He isn't keeping it a secret, and I expect word has gotten to KL by now.  Swyft's trip to Braavos indicates that that something seems to have worked.  

3.  While Littlefinger may have embezzled some amount of money, I suspect that most of the losses are due to Robert's extravagance.  In any event, I doubt that Littlefinger could embezzle enough to bring down the Iron Bank.

The Iron Bank gives every indication of being a very well capitalized and well run institution.  And I suspect that, given its importance to Braavos, the Sealord would backstop it or arrange for financing in case of trouble like a pre-planned run.  I expect the Iron bank to be the last one standing.  If it goes under, it will be after (and maybe because) everyone else already has.

In any event, Braavos and Pentos are a sideshow to the main event, which is Westeros, so I'm not sure how important the Iron Bank will be in the end.  Also, Littlefinger himself isn't actually a main character, but more a foil and antagonist for others, such as Ned, Tyrion, and Sansa, as well as an all-around troublemaker. He certainly isn't the Big Bad of the series, responsible for everything bad that has or will happen. 

[John Suburbs]

On 6/25/2021 at 11:58 AM, Loose Bolt said:

Just now Vale is potential king/queen maker. Or her armies could outgun any army of kingdoms except Reach and bc their granaries are full they could feed their troops and people. Besides if they would ally with Braavos and her navy invading Vale would be very bad idea for anyone without dragons.

So if I were Iron Bank and I would suspect that Iron Throne cannot or would not want to pay back it's debts I would take over Vale by killing previous regent of Vale (Lysa) and replace her with my puppet "Littlefinger" actually a FM.

Sooner or later king or IlIyrio would either pay back national debt or he will be killed and replaced by FM wearing his face and whose first action as new king/regent  would be to pay that debt naturally including necessary service fees like wages of "consultants". Or team Blackfyre basically would finance their own assassinations

 

One reason why Switzerland is nowadays very rich country is that many warlords and criminals had deposit spoils of their crimes to banks of that country but all of them never came back for their money. So Swiss had became very rich by keeping all that loot. So I assume that Iron Bank will keep all gold whose previous owners are dead. 

 

No, that's not how the IB operates. If someone welches on a debt, they don't invade someone else to recoup the loss. Petyr was acting as a representative of the crown when he borrowed the gold. It's the crown's debt, not Petyrs. But even if they did decide to go after him in the Vale, this is still to Illyrio's benefit because it means even more money is being drained from the bank's coffers.

Why would Illyrio pay back the debt? It's not his debt either. And no, the FM do not kill kings and triarchs and then simply wear their faces to rule in their place. They kill leaders and then back new leaders to replace them. If they could just replace a king with one of their own, then why are they bothering with Stannis? Just kill Cersei and take her face. And all of this is overlooking the fact that even if a new king wanted to pay back the loan, he can't. The treasury is empty.

Um, no. First, Switzerland is not any more or less wealthy than any other country of its size. It's banks hold a lot of wealth, but they also loan out a lot of money -- historically some 97 percent of their holdings. So most of their wealth is on paper. When a depositor dies, the bank doesn't just get to keep their money. It goes to heirs, or if they are a deposed ruler it often is returned to their country of origin following a lengthy court case.

But again, even if the IB works this way, it doesn't just keep the gold in a big vault. It loans it out to get a good rate of return over time. This is what banks do. The IB has loaned out a substantial amount to the crown, and is now loaning even more to Stannis, all while payments are slowing down or stopping -- not just from the war in Westeros but the disruption to the slave trade. If/when Stannis dies, people will suddenly realize that the bank has no more champions to support. Then all it will take is a run on deposits, which Illyrio can easily orchestrate, and panic sets in the crash the bank in a day.

That's why I think the plan is. Whether it will work is another matter.

[John Suburbs]

On 6/26/2021 at 2:58 PM, Nevets said:

1.  Braavos uses gold and silver as their currency, just like everyone else.  The only iron coin we have seen is the one Arya has, and that definitely isn't money.  More like a Faceless Man token.

2.  While Littlefinger may wish for Stannis to be gone, he has done nothing to bring it about. The only thing he has done is provide (f)Arya to the Lannisters,, and that plot was in motion well before Stannis set foot in the North.

In any even, Stannis is the Iron Bank's Plan B.  Their plan A is for the Crown to pay their own debt, hence the pressure being placed on the Kings Landing business community, in the hopes that they can put pressure on the Crown.  Nestoris's trip to Stannis may be pressure as well. He isn't keeping it a secret, and I expect word has gotten to KL by now.  Swyft's trip to Braavos indicates that that something seems to have worked.  

3.  While Littlefinger may have embezzled some amount of money, I suspect that most of the losses are due to Robert's extravagance.  In any event, I doubt that Littlefinger could embezzle enough to bring down the Iron Bank.

The Iron Bank gives every indication of being a very well capitalized and well run institution.  And I suspect that, given its importance to Braavos, the Sealord would backstop it or arrange for financing in case of trouble like a pre-planned run.  I expect the Iron bank to be the last one standing.  If it goes under, it will be after (and maybe because) everyone else already has.

In any event, Braavos and Pentos are a sideshow to the main event, which is Westeros, so I'm not sure how important the Iron Bank will be in the end.  Also, Littlefinger himself isn't actually a main character, but more a foil and antagonist for others, such as Ned, Tyrion, and Sansa, as well as an all-around troublemaker. He certainly isn't the Big Bad of the series, responsible for everything bad that has or will happen. 

1) There is gold and silver in Braavos. It is currency anywhere. The Braavosi iron coin is square and is the proxy currency for those who have no other coin.

Quote

Yet they had brought him money: leather purses plump with gold and silver and the square iron coins of Braavos.

    -- Arya watching the money-changer

While Arya never says that the coin JH gave her was round, it stands to reason that it is, since a square coin is rare. She also says it is indistinguishable from a silver coin in the dim light, which suggests it is round. That is the token of the FM.

2) Really? Littlefinger betrayed Ned who was about to put Stannis on the throne. He brokered the alliance that smashed Stannis on the Blackwater. And yes, Stannis was heading north at about the time the fArya plot was hatched, but he still provided her, which gave the Lannisters a wedge into the north

Stannis may be plan B, but they just handed over a boatload of cash to him. Right now, Stannis is freezing his Baratheons off in the north while fAegon is only a short march away from King's Landing and may very well have the backing of Dorne and the Reach in short order. And if Stannis dies? Who do they back then? Any new champion will have a dubious claim to the throne at best and will have to overpower at least six of the seven great houses to take the throne -- something it took Aegon the C three years to do, and he had dragons. The IB could collapse in a day.

Was it just King's Landing? I thought the IB was calling in loans from all across Westeros. But regardless, if this is a pressure tactic, it's bound to fail. The crown has no gold to pay its loans even if it wanted to. So how is crashing the economy going to fix this? If anything it will make it worse. Any time a bank starts calling in functioning loans like this it's a sign of trouble. It means it must give up future profitability because it needs cash now.

3) The loans to the crown are likely to be far larger than loans to any of the Free Cities, save maybe for Volantis. The crown's needs extend across an entire continent encompassing multiple large cities like Oldtown, King's Landing, Lannisport, etc., while the free cities require funds for their single cities. So while the IB may have a fearsome reputation, it is still vulnerable if it does not manage its money wisely. The Rogare Bank was said to be even wealthier and more powerful than the IB, and it failed.

If the Sealord was in a position to bail out the Iron Bank, then it wouldn't be the IB that is the financial powerhouse of the known world, it would be the Sealord. More than likely, the wealth of Braavos is kept in the Iron Bank, which is what backs the iron coin. If the Bank goes under, so does the Braavosi economy.

No, Braavos and Pentos are not a sideshow. Don't make the mistake in thinking that the whole world is focused solely on who sits the Iron Throne. Braavos and Pentos have their own issues, and this is the main event as far as they are concerned.