Tyrosh Lannister Posted October 21, 2022 Share Posted October 21, 2022 A kingdom borrows a huge sum of money from the iron bank. The iron bank asks them to pay them back. The kingdom is unable to pay them back and refuses to. The iron bank then funds a rebel lord to take over the kingdom . Rebel lord becomes king. Rebel lord now king also unable to pay kingdoms debts owed to iron bank and refuses to. Iron bank funds another rebel lord. and so the cycle continues... As you can see the iron bank keeps on funding rebels and doesn't get its money back. They are losing money. How are they still afloat and how do they get their money back eventually? Link to comment Share on other sites More sharing options...
Craving Peaches Posted October 21, 2022 Share Posted October 21, 2022 I think that the Iron Bank and the Faceless Men are two sides of the same coin. So the Bank would have access to all the money made from those assassinations. Presumably they would usually get their money back plus interest because people are wary of their reputation and so repay the loans. With the interest and money from the assassinations I don't think they'd ever really run out of money completely. I assume they have assets other than gold as well such as property, shares in business, renting out vaults for storage etc. Even if all their debtors defaulted at once, I think they'd be able to keep going. They likely have other sources of income and a contingency plan. Link to comment Share on other sites More sharing options...
chrisdaw Posted October 21, 2022 Share Posted October 21, 2022 Because the crown can pay the IB back but refuse to. If the crown had not the means to pay back the loan the IB wouldn't have leant to them in the first place. The crown refuses to pay the IB, the IB responds by backing a rebel lord, the rebel lord wins and becomes king and they pay back the IB because they want to stay king and if they don't pay back the IB it will back the next rebel lord and they won't stay king for long. Link to comment Share on other sites More sharing options...
astarkchoice Posted October 21, 2022 Share Posted October 21, 2022 39 minutes ago, Craving Peaches said: I think that the Iron Bank and the Faceless Men are two sides of the same coin. So the Bank would have access to all the money made from those assassinations. Presumably they would usually get their money back plus interest because people are wary of their reputation and so repay the loans. With the interest and money from the assassinations I don't think they'd ever really run out of money completely. I assume they have assets other than gold as well such as property, shares in business, renting out vaults for storage etc. Even if all their debtors defaulted at once, I think they'd be able to keep going. They likely have other sources of income and a contingency plan. This Plus modern finance has shifted (due to political.donors ) to take some of the blame/risk away from the lenders/banks.....back in medieval times itd be more balanced therefore lenders would want to ensure to only lend to those who unquestionably can repay or have assets to recover to make the risk worth it! Link to comment Share on other sites More sharing options...
Equilibrium Posted October 21, 2022 Share Posted October 21, 2022 Tax farming. It was used regardless, there is even a mention by Tyrion I seem to recall. Medieval rulers did farm out taxes to foreigners occasionally, although not banks, but merchants who operated in their realm, they preferred to just stiff the banks. If IB doesn't want the hassle no matter how lucrative, and tax farming was lucrative, you simply instruct your existing contracted tax farmers to pay the rent to IB directly not to you. So you take the throne with the help of the IB, treasury is empty, you know you have to pay up or you go down like your predecessor did. So you sit down with the emissary, and hammer out a deal what taxes for what duration belong to IB, say Gulltown customs for 50 years, or KL customs for 10 years or all customs for how ever long it takes. Now as a King you don't have healthcare and police to fund or roads to pave, your only expenses you have to pay are Gold Cloaks and maybe some servants, there rest spent on tournys, feasts and construction projects you can just give to IB because it's better not to feast for a while than to loose throne like your predecessor did. Not that it would be necessary, if you are not universally supported and you wouldn't be, since than you wouldn't need IB to take the Throne, there will be lords fighting for their previous monarch and those lords will loose a chunk of their property, according to you benevolence, now assuming IB doesn't want property as all things point out to that (plus they certainly don't want castles in Westeros), you just auction it off and give them proceedings. And IB has shown to be more than open to renegotiation, they don't really need some King's money, they care more about the precedent, no one refuses to pay back to the IB. If they helped you topple the King and you are willing to pay but really destitute they would as they say now reprogram you debt maybe lower or forgive the interest or something, it's still cheaper than funding the rebels until they strike the gold with one who is willing to sell his jewels or tax his economy to a halt and his nobility into rebellion just to pay full sum. Link to comment Share on other sites More sharing options...
sifth Posted October 21, 2022 Share Posted October 21, 2022 The one plot in the series I don’t understand is the Iron Bank and it’s involvement with Stannis. Is that plot going anywhere and if not, why was it even added into the story? Link to comment Share on other sites More sharing options...
Sandy Clegg Posted October 21, 2022 Share Posted October 21, 2022 I had one theory that The Iron Bank is also a "blood bank" (iron in the blood) and they have stores of various people's blood that can be used in blood magic rituals, which we know are a thing in ASOIAF. Melisandre puts a high value on King's Blood, so maybe they've turned this to profit? Side note - I've been having quite a lot of HP Lovecraft-inspired thoughts these days on my re-read. Must be the Halloween spirit ... Link to comment Share on other sites More sharing options...
Corvo the Crow Posted October 21, 2022 Share Posted October 21, 2022 . Link to comment Share on other sites More sharing options...
Craving Peaches Posted October 21, 2022 Share Posted October 21, 2022 Crazy idea I just came up with: proto plastic surgery using the faceless men face removal affixing technique. Wealthy clients who need to 'dissapear' pay lots and lots. Link to comment Share on other sites More sharing options...
James West Posted October 21, 2022 Share Posted October 21, 2022 Funding wars and successions is but a small part of what they do. The bank lends to businesses large and small. Essos has more advanced commerce and can support the growth of the bank. They made bad loans to Westeros. The loans to Stannis and Jon are not secure. Tycho will be in deep sh!t very soon with his employer. The bank took a chance with Stannis. Pretend for a short minute that Stannis became king. The bank would impose austerity measures on Westeros (like we did to Greece). Stannis would tax the hell out of the people and try to force the lords to pay more. His time on the throne will make Truss' time as PM an eternity. The loan to the watch is not secure but the bank got lucky when Marsh killed Jon. Their chances of getting their money back just doubled. Marsh is a good administrator while Jon Snow sucked. It is still a bad loan even if the chances of getting it back doubled. Winter is upon them. Revenue is not coming. Link to comment Share on other sites More sharing options...
Sandy Clegg Posted October 21, 2022 Share Posted October 21, 2022 34 minutes ago, Corvo the Crow said: Blood isn't something you can store "long term" though, especially considering medieval technology. Ah, but if it was cold enough you sure could. Aren't the initials of the Iron Bank ... IB? In the shivering sea. The land of Ib would certainly be a cold enough place to store blood, and they actually have quite a creepy history, where they would send criminals to the island of Ib Sar and mutilate them so they could not return. Hmmm. Check out the wiki page: Ib and the Port of Ibben The island even looks like a lamb being slaughtered, with drips of blood. Also, the Port of Ibben is ruled by the Shadow Council (wealthy guildsmen, ancient nobles, priest, and priestesses) which kind of sounds very vampiric to me. Not to mention (if you are a fan of GRRM's fondness for puns) that the other meaning of port is literally 'fortified wine'. A fort that holds 'wine' certainly sounds like a 'blood bank' to me. Link to comment Share on other sites More sharing options...
Terrorthatflapsinthenight9 Posted October 21, 2022 Share Posted October 21, 2022 They'll get their money back only after things finally got stable again on Westeros, and that the Iron Throne has finally a competent monarch with a competent master of coins that will finally repair the damages done by Littlefinger and his men and sanitize the Seven Kingdoms finances. Link to comment Share on other sites More sharing options...
Rondo Posted October 22, 2022 Share Posted October 22, 2022 Through taking back financed property or selling the collateral. Most borrowers pay though. The bank would have folded long ago if that were not the norm. The interests income make up for the loans they write off. Robert ruined the Westeros economy and put that kingdom in heavy debt. Whoever takes the throne, which most probably will be Daenerys Targaryen, will honor the debt and pay it off. Link to comment Share on other sites More sharing options...
chrisdaw Posted October 22, 2022 Share Posted October 22, 2022 9 hours ago, sifth said: The one plot in the series I don’t understand is the Iron Bank and it’s involvement with Stannis. Is that plot going anywhere and if not, why was it even added into the story? It brought the IB to Jon. Link to comment Share on other sites More sharing options...
Nevets Posted October 22, 2022 Share Posted October 22, 2022 If a borrower doesn't pay back his loans, he is unlikely to get more extended to him. And if the borrower is a government or merchant, they will probably need a regular supply of credit. Cersei is finding this out the hard way. So if you're solvent it is best to pay up. If insolvent, the bank is out of luck, but they try to avoid that. I doubt the Iron Bank and the Faceless Men are linked, but they probably have lines of communication so if a debtor is particularly difficult, a replacement can be created. Financing rebels can work with governments, even if it is only a pressure tactic. The IB is making no secret of its interest in Stannis. I'm sure they intend the Lannisters to know and be worried. Somebody will win and pay up. Link to comment Share on other sites More sharing options...
astarkchoice Posted October 22, 2022 Share Posted October 22, 2022 Another issue to remeber is this is feudal times..a lords word is important Nor paying a debt or breaking a bond a big deal Link to comment Share on other sites More sharing options...
Craving Peaches Posted October 22, 2022 Share Posted October 22, 2022 10 hours ago, James West said: The loan to the watch is not secure but the bank got lucky when Marsh killed Jon. Nope. 10 hours ago, James West said: Their chances of getting their money back just doubled. Their chances of getting the money back have fallen to almost zero because if Jon doesn't recover in time then the wall is doomed. Jon was the one holding everything together. 10 hours ago, James West said: Marsh is a good administrator while Jon Snow sucked. It is still a bad loan even if the chances of getting it back doubled. Winter is upon them. Revenue is not coming. If Jon hadn't taken out the loan,they would have less food to feed everyone, something Bowen himself was moaning about. Link to comment Share on other sites More sharing options...
Loose Bolt Posted October 22, 2022 Share Posted October 22, 2022 On 10/21/2022 at 1:11 PM, Tyrosh Lannister said: How are they still afloat and how do they get their money back eventually? Iron Bank might gain special rights like collecting custom revenues in harbors, roads and bridges. Monopolies of buying or selling stuff like timber, salt, alcohol ... Or they could gain right to carry out business without having to pay any taxes to local king. Link to comment Share on other sites More sharing options...
Kierria Posted October 23, 2022 Share Posted October 23, 2022 The IB charge interests on their loans. They have actuaries and accountants on their payroll. They know the interest rate to charge to keep the business thriving. Properties financed through the bank will be required to carry insurance. Loss of the property still gets the bank compensated because it is insured. Link to comment Share on other sites More sharing options...
Ring3r Posted October 24, 2022 Share Posted October 24, 2022 They're basically working a debt-economy, much like ours. So long as not all debts get called at once, they can continue to turn a profit on interest that does get paid, and afford to write off losses, even large ones. And they simply kill those who reneg on their debts, either by sending a faceless man, or by supporting a rival. That serves as a deterrent in nearly all cases, the exception being Cersie, because she's a psychotic moron. Link to comment Share on other sites More sharing options...
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