How does the iron bank eventually get back it's money they loaned ?

[Ring3r]

On 10/24/2022 at 10:01 AM, John Suburbs said:

This won't work if Aegon takes the crown. He's going to declare all debts by usurpers and murderers to be theirs. So sure, the bank will send an FM after him, depleting its coffers even more. And all they'll get for their troubles is another civil war that will most likely devolve the realm into seven independent kingdoms again, none of which owes a penny to the Iron Bank.

And if Stannis is dead by this point, the bank has no rival to support because there are no more legitimate blood ties to the Baratheon regime -- save for Shireen, and who's going to support her? That means even more time and enormous amounts of gold to subjugate all of the great houses -- including impregnable fortresses like Casterly Rock, the Eyrie and Storm's End. Remember, Westeros is not Essos, where anyone with enough money and muscle can become the new triarch or archon.

So at some point, bank depositors will realize that this time the IB will not get its due and the resulting panic could drive it into insolvency in a day. And who would benefit from that, I wonder?

Yeah, I don't think the Crown's debt to the iron bank is nearly enough to ruin the bank.  They have loans out literally all over the world.  It's certainly a hefty chunk of change, but I don't think it's enough to crash them.  They're running a risk, anyone dealing with a debt economy is, but they wouldn't have run THAT much of a risk.

[John Suburbs]

22 hours ago, Corvo the Crow said:

I want to know where you’re getting this, the Illyrio part. Have I missed some large discussion or a great post  this? Because at face value Varys and Petyr are on opposing camps and Illyrio is Varys’ friend.

There are no friends among thieves. Just because two people are working for the same man doesn't mean they are on the same side. Just look at the small council.

Here is why I think Petyr and Illyrio are in cahoots:

First, there is Petyr's backstory where he shows up in Gulltown with his minor sinecure as a junior customs official and immediately starts collecting ten times the amount of all the more senior officials. How is this possible? Either Petyr is collecting more than is owed, which would lead to howls of protest from the traders and merchants in Gulltown, or he is collecting the right amounts and exposing all the other officials, including the chief, as either crooked, incompetent or both. Docks are very dangerous places run by powerful men who use thugs and press gangs to keep everything in order. People who come in and rock the boat are given a one-way ticket to the bottom of the Narrow Sea, and Petyr is all alone -- a young, skinny kid with no money, no men-at-arms, no nobody. So the only way he could have pulled this off is if he had a financial backer who could supplement his collections and pay off or remove anyone who started asking questions.

But how do we know this is Illyrio? Let's look at the conversation in the dragon room. Varys gets through telling Illyrio all the secrets he knows about the high and mighty in King's Landing: he knows about Ned and the book, he knows about Bran and the dagger, he knows about the Margaery plot . . . and yet when it comes to Petyr, "the gods only know what game Littlefinger is playing." And this is after they both know that Petyr is mucking with the finances of the realm they hope to usurp and he is directly responsible for events moving too quickly in Westeros for Illyrio's liking. But does Illyrio even bat an eye over this? Do either of them take any steps to penetrate this one blind spot in the entire nobility? No. So mayhaps Illyrio already knows exactly what game Littlefinger is playing?

Then note that it was Petyr who talked the small council out of sending an FM after Dany, noting correctly that whoever did make the attempt would botch it and put the Dothraki on their guard. It did more than that, it caused Drogo to recommit to invading Westeros immediately -- exactly what Illyrio wanted.

So Illyrio is playing a double game here. He's using Varys to put fAegon on the throne, and he's using Petyr to destabilize the Iron Bank. I suspect the difference is that while Petyr knows about Illyrio and Varys, Varys does not know about Illyrio and Petyr. And after the bank is gone and Pentos is top dog on the Narrow Sea, Petyr and Varys can do what they like with whatever is left of Westeros.

[Craving Peaches]

3 minutes ago, John Suburbs said:

And after the bank is gone and Pentos is top dog on the Narrow Sea

If the IB collapses, why would Pentos be spared the economic fallout? The bank collapsing would hurt more than Braavos. It would hurt the economy of all the Free Cities. Unless Pentos is the only one to have no ties with the bank, which I find very unlikely. And even then, just because Braavos is out of the picture doesn't mean Pentos is the strongest. There are other free cities like Tyrosh in the region.

[John Suburbs]

20 hours ago, Loose Bolt said:

Existing ships and their crews would not disappear but instead at least some of them would go rogue or become pirates and raiders if economy of B will collapse. After all sailors and mariners in those ships need some way to support themselves and their families . So if IB goes down then northern Narrow Sea would have huge pirate and raider problem and there is even a possibility that some of new warlords will decide to sack Pentos. After all P is very rich city but has very weak military. 

 

Could one really feed 500k people in KL without using ships for that purpose? After all one would need at least 1/2 million kg (over 1 million pounds) of food everyday to feed that city. So I am almost certain that any major city in Westeros would have huge problem if ships would stop coming to their harbors.

OK, rogues and pirates, just like what already exist on the Narrow Sea. And do you suppose that some of them might come into the employ of a certain cheesemonger with the wealth to ensure a steady flow of income rather than scrounging for ships? That's how he plays the Dothraki, after all. The point is there is no longer an organized fleet of Braavosi ships exerting its influence over everything. And still, there is enough food and wealth in the realm to keep Aegon on the throne just long enough to get rid of Stannis and cause the bank to crash. After that, Illyrio doesn't care what happens to the Iron Throne.

Pentos doesn't have just a weak military; it has no military at all. It is forbidden by Braavos. All that goes away, however, when the bank crashes and the Braavosi economy tanks. So Pentos wins.

King's Landing gets plenty of food from the Reach. The bread riots only happened when Mace closed off the Rose Road, not when the harbor closed. And again, Illyrio doesn't care what happens to King's Landing, just as long as the bank goes and Pentos regains its autonomy.

[John Suburbs]

18 hours ago, chrisdaw said:

How defensible Casterly Rock is is an irrelevancy, the crown can draw upon the wealth of the realm to pay back the IB, the wealth exists but the crown (the extremely near sighted Cersei) in this instance refuses to draw from it.

They're a bank, they only know the long game.

Again, what Cersei will or will not do is irrelevant. Illyrio is going to put Aegon on the throne, and he is not going to honor the debts incurred by those who killed his family and took his crown. He is going to decree that Lannisters and Baratheons pay their own debts. Mark my words.

[Craving Peaches]

7 minutes ago, John Suburbs said:

Pentos doesn't have just a weak military; it has no military at all. It is forbidden by Braavos. All that goes away, however, when the bank crashes and the Braavosi economy tanks. So Pentos wins.

Pentos would have to build up its own forces, by which time someone who already has an army/navy e.g. Tyrosh or Lys, could already have taken the initiative, if Braavos fell from grace.

And so far I haven't seen anything to suggest Pentos wouldn't also be hurt by the IB's collapse.

[John Suburbs]

14 hours ago, Ring3r said:

Yeah, I don't think the Crown's debt to the iron bank is nearly enough to ruin the bank.  They have loans out literally all over the world.  It's certainly a hefty chunk of change, but I don't think it's enough to crash them.  They're running a risk, anyone dealing with a debt economy is, but they wouldn't have run THAT much of a risk.

Realize that the loans to the Iron Throne are far larger than anything given to the free cities, save perhaps Volantis. The Iron Throne manages the economy of an entire continent while the cities control only their immediate areas.

But the loan itself does not need to completely empty the bank's coffers in order to prompt a panic. All that's needed is for depositors to lose faith that their money is safe, and the IB's reputation is built on always getting its due. What that fails, it won't take much to start a panic -- and Illyrio will have hundreds of proxy depositors (using the very money that the bank loaned out in the first place) to orchestrate this.

Also, there is the fact that the bank's incomes are about to take a hit from the disruption of the slave trade. Even though the bank does not loan to slavers (or so it thinks), all trade is affected by the mess in Slaver's Bay. So incomes are about to take a hit.

And we can already see the signs that the bank is in trouble. First, it has begun calling in loans all across Westeros. Some may think this is a power move to pressure the crown, but it's a bad one. The crown is already short of cash, so how is disrupting the economy even further supposed to help? Any time a bank starts calling in loans before they are due it is a sign of trouble -- it means they must sacrifice future profits to raise cash now.

Also, let's look at the loan to the Night's Watch. When Jon first proposes this, the answer is a hard no: no way, no how, not ever, impossible. The wealthiest, most powerful bank in the world can't even come up with the money to buy enough barley and salted fish to feed a few thousand people through the winter? Then, of course, the impossible became possible, and later we see how: the wilding treasure, meager as it is, is collateral for the line of credit that will, I suspect, ultimately be paid for in wood, which is rare and valuable in Braavos but lies in abundance at the Wall. So again, we see the bank jumping at this chance for an immediate cash infusion, because it desperately needs to refill its coffers.

[John Suburbs]

22 minutes ago, Craving Peaches said:

If the IB collapses, why would Pentos be spared the economic fallout? The bank collapsing would hurt more than Braavos. It would hurt the economy of all the Free Cities. Unless Pentos is the only one to have no ties with the bank, which I find very unlikely. And even then, just because Braavos is out of the picture doesn't mean Pentos is the strongest. There are other free cities like Tyrosh in the region.

Pentos regains its autonomy. It can arm itself once again. It can start trading in slaves. It will be the dominant power on the Narrow Sea. Yes, the economy will take a hit, but that will be temporary, and Braavos will be hurt worst of all and will likely never regain its dominance because its central institution has been destroyed.

Tyrosh, Myr and Lys are perpetually at war with one another, and they are way to the south. Pentos has the direct line to King's Landing, Maidenpool, Saltpans, Gulltown, White Harbor and Eastwatch. They are sitting pretty. 

[John Suburbs]

15 minutes ago, Craving Peaches said:

Pentos would have to build up its own forces, by which time someone who already has an army/navy e.g. Tyrosh or Lys, could already have taken the initiative, if Braavos fell from grace.

And so far I haven't seen anything to suggest Pentos wouldn't also be hurt by the IB's collapse.

Again, Tyrosh, Lys, etc are constantly at war with one another, and their navies are not all that powerful or else the Stepstones would not be the den of pirates. Some in Pentos might take a hit from the fall of Braavos, but most, like Illyrio, will not. Pentos hates Braavos. They've been at war for centuries and Pentos is now a vassal state only because of the crooked deal that resulted in the last treaty, which was probably done through bribes from the Iron Bank.

[Corvo the Crow]

.

[Craving Peaches]

Just now, Corvo the Crow said:

Pentos may not benefit from IB collapsing but if Braavos collapses they can change the no slavery agreement imposed on them.

They can, but I also think they would be quite damaged if the bank went under. I would imagine they have quite a few economic ties with Braavos, being nearby and closely linked. So if the Bank went under, I don't think people in Pentos would necessarily go 'Yay, we're free!'. I'm willing to bet that quite a lot of magisters have dealings with the bank. Obviously they would get some advantages such as being able to reinstitute slavery and build up a navy again, but I don't think they'd get away lightly.

[chrisdaw]

5 hours ago, John Suburbs said:

Again, what Cersei will or will not do is irrelevant. Illyrio is going to put Aegon on the throne, and he is not going to honor the debts incurred by those who killed his family and took his crown. He is going to decree that Lannisters and Baratheons pay their own debts. Mark my words.

I don't even know what you're on about now. If they back a losing contender they don't get paid, yeah, obviously.

[Ring3r]

8 hours ago, John Suburbs said:

Realize that the loans to the Iron Throne are far larger than anything given to the free cities, save perhaps Volantis. The Iron Throne manages the economy of an entire continent while the cities control only their immediate areas.

But the loan itself does not need to completely empty the bank's coffers in order to prompt a panic. All that's needed is for depositors to lose faith that their money is safe, and the IB's reputation is built on always getting its due. What that fails, it won't take much to start a panic -- and Illyrio will have hundreds of proxy depositors (using the very money that the bank loaned out in the first place) to orchestrate this.

Also, there is the fact that the bank's incomes are about to take a hit from the disruption of the slave trade. Even though the bank does not loan to slavers (or so it thinks), all trade is affected by the mess in Slaver's Bay. So incomes are about to take a hit.

And we can already see the signs that the bank is in trouble. First, it has begun calling in loans all across Westeros. Some may think this is a power move to pressure the crown, but it's a bad one. The crown is already short of cash, so how is disrupting the economy even further supposed to help? Any time a bank starts calling in loans before they are due it is a sign of trouble -- it means they must sacrifice future profits to raise cash now.

Also, let's look at the loan to the Night's Watch. When Jon first proposes this, the answer is a hard no: no way, no how, not ever, impossible. The wealthiest, most powerful bank in the world can't even come up with the money to buy enough barley and salted fish to feed a few thousand people through the winter? Then, of course, the impossible became possible, and later we see how: the wilding treasure, meager as it is, is collateral for the line of credit that will, I suspect, ultimately be paid for in wood, which is rare and valuable in Braavos but lies in abundance at the Wall. So again, we see the bank jumping at this chance for an immediate cash infusion, because it desperately needs to refill its coffers.

An interesting theory for sure.  I'm not convinced that it's some kind of conspiracy by Mopatis though.  Never really heard that theory before.  It'd make a good thread, if you wanted to detail it.  Or if you've already done that, do you have a link to the thread?  Sounds like it'd make a good read.

[John Suburbs]

16 hours ago, chrisdaw said:

I don't even know what you're on about now. If they back a losing contender they don't get paid, yeah, obviously.

Illyrio is trying to put Aegon on the throne, right? That means Cersei will be deposed. And if that happens, Aegon will not pay back the loan, right? Compound this with Stannis dying and the realization that, unlike Essos, the IB cannot back just anyone to retake the throne -- they need someone with a legitimate claim in order to get the backing of the Westerosi lords. Without Stannis, they have no one, while Illyrio has Aegon, blood of the dragon and scion of the old dynasty. So, yeah, obviously the bank has backed the losing contender(s) and will not get paid, aka, the Iron Bank will not get its due.

This weakens confidence in the bank so that depositors start to think they could lose all of their savings. In that environment, all it will take to start a run on the bank is for someone, or many someones, to ask to withdraw their accounts and be denied. And if Illyrio is smart, which he is, he will have made hundreds of proxy deposits that he can attempt to withdraw all at one, causing the bank to close its windows. And that sets off the panic that brings it down within a day, just like what happened to the Rogares.

That's the plan anyway. We'll have to see if it actually works.

[John Suburbs]

13 hours ago, Ring3r said:

An interesting theory for sure.  I'm not convinced that it's some kind of conspiracy by Mopatis though.  Never really heard that theory before.  It'd make a good thread, if you wanted to detail it.  Or if you've already done that, do you have a link to the thread?  Sounds like it'd make a good read.

Yeah, there's a thread in here somewhere, probably several years back so I don't have the link. You can probably search for it. But it's basically what I've laid out here: Illyrio working with Petyr to get the bank to overextend itself so they can crash it and free Pentos from the peace treaty, and set up Petyr as top dog in a now-fractured Westeros.

At the very least, it's far more plausible than Illyrio wanting to be a servant to a snotty teenage king.

[Craving Peaches]

2 hours ago, John Suburbs said:

At the very least, it's far more plausible than Illyrio wanting to be a servant to a snotty teenage king.

There is also a theory that Aegon is Illyrio's son or his beloved wife's son, can't remember which but that could explain why he cares about Aegon.

[Ring3r]

10 hours ago, John Suburbs said:

Yeah, there's a thread in here somewhere, probably several years back so I don't have the link. You can probably search for it. But it's basically what I've laid out here: Illyrio working with Petyr to get the bank to overextend itself so they can crash it and free Pentos from the peace treaty, and set up Petyr as top dog in a now-fractured Westeros.

At the very least, it's far more plausible than Illyrio wanting to be a servant to a snotty teenage king.

The part I don't buy is the cooperation with Littlefinger.  Mopatis and Varys are confirmed to be working together, and Varys and littlefinger certainly seem to be somewhat opposed.

[Terrorthatflapsinthenight9]

I don't see any reason to believe that Littlefinger and Illyrio even know each other, even less are partners. 

Besides the crash of the Iron Bank wouldn't be good news for Pentos' own bank and economy, when a bank falls down all the other banks are in turmoil because they are all connected and that the economic fallout affect everyone of them. 

And Pentos still doesn't have an army and military fleet, which would take years, radical reforms, many foreign instructors and trainers since Pentos doesn't have its own soldiers yet, great administrative work and a stable economy and revenues which would be far from sure if the Iron Bank crashes.

And it would take supplementary years to make sure that they are ready for battle. 

[John Suburbs]

23 hours ago, Craving Peaches said:

There is also a theory that Aegon is Illyrio's son or his beloved wife's son, can't remember which but that could explain why he cares about Aegon.

Yeah, I like mine better. The only thing supporting the son theory is the look Illyrio gives when he doesn't get to see Young Griff, but I chalk that up to him knowing that in order for the plan to work Aegon will most like have to die.

Meanwhile, I see all kinds of things that point to the bank plot.

[Aldarion]

18 minutes ago, John Suburbs said:

Yeah, I like mine better. The only thing supporting the son theory is the look Illyrio gives when he doesn't get to see Young Griff, but I chalk that up to him knowing that in order for the plan to work Aegon will most like have to die.

 

And the fact that a statue of Illyrio as a young man is described similar to Aegon. And the fact his wife apprently had Valyrian features.

It is a questionable theory, as all are, but far from being without support in the text.