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The Iron Bank and the mockingbird


SpaceChampion

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Yeah, in my opinion, the Iron Bank being willing to make loans in that amount is only slightly more absurd than the premiss that Stannis could actually buy a mercenary army large enough to even become competitive for the crown. You can rationalize it how ever you want. They want to preserve their reputation and he is the best candidate for them to get any money back, but I just find it unbelievable: wasted pages on a stupid idea.

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Even though I don't think GRRM has put that much elaboration into the economic background of his story (and I definitely don't think it's necessary, or a bad thing he didn't do so), I'd say that in this case there's more arguments - from a theoretical point of view - which could point to the IB's interest in supporting Stannis.

Reasons why Stannis is the most likely candidate have already been listed, and I agree with these. The question still is whether it's actually worth supporting him anyway, or if that'd be too expensive. Well, for all we know, the IB has more information about its accounting and calculations than we do, so they should have their reasons. This implies, if they are not grossly mistaken, that the costs of supporting Stannis are relatively small compared to the crown's debt. How much can hiring 30,000 sellswords for 2 years cost? I'd say not more than 100,000 drakes or so (don't recall what Tyrion paid exactly, but ~3 per person shouldn't be too far off, at least from what I get of the scarce info on prices, that should get the average mercenary quite a lot). By the time of ADWD, the crown is probably at least around 1.5-2 million in debt to the IB. So even if you add expenses for shipping and logistics, you probably wouldn't get to much more than about 10% of the original debt which, for the moment, is completely depreciated for the IB - and you'd get a chance to recover it.

Now if we accept that Stannis's chances are quite grim, though, and also assume (which is likely) that the IB knows this as well, there must be more to the whole thing. Now the IB is pretty big, afaik the biggest bank in the WoIaF by far. This probably allows them to issue some kind of paper money, and I assume this is what the crown ultimately got. With this option, the bank can reap great profits by expanding its balance sheet and lending out more credit than they actually have deposits. This is what is common in financial markets ever since there's been something like "proper" banks. With this process comes term transformation, as deposits are usually short-term, while banks tend to lend a lot long-term. Probably the same in the WoIaF. Merchants have their deposit accounts for balances @ the IB, and the IB lends e.g. to governments like that of Westeros.

So, the IBis really big, but how big can it really be? If one of the world's biggest banks today held 25% of the U.S., German or Japanese government bonds, I don't really see that bank surviving if the states were to default. It would run illiquid, there'd be a bank run etc., and the bank itself defaults. Now, as I said, the IB is big, but I don't really see it possibly being big enough to be able to survive a default of a huge nation like Westeros of which it holds a big part of the debt - at least not if any other shock occurs.

So to sum up: the fact that the IB has lend so much money to the Westerosi government, and the problem that they basically refuse paying, may pose a liquidity problem or at least get the bank close to one so that any further shocks (e.g. merchants nervously drawing their deposits because of wars everywhere now, preferring to hoard gold coins) might tip the scale. Since illiquidity would spell disaster, the bank needs to avoid this at all costs, and while the menace still looms, at least provide the impression to the public that its doing everything to get its money (I suppose the loans would be paid back in coin) back.

Sorry if parts happen to be confusing, I'm really tired right now, so if anything's not clear, please ask ;)

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Even though I don't think GRRM has put that much elaboration into the economic background of his story (and I definitely don't think it's necessary, or a bad thing he didn't do so), I'd say that in this case there's more arguments - from a theoretical point of view - which could point to the IB's interest in supporting Stannis.

Reasons why Stannis is the most likely candidate have already been listed, and I agree with these. The question still is whether it's actually worth supporting him anyway, or if that'd be too expensive. Well, for all we know, the IB has more information about its accounting and calculations than we do, so they should have their reasons. This implies, if they are not grossly mistaken, that the costs of supporting Stannis are relatively small compared to the crown's debt. How much can hiring 30,000 sellswords for 2 years cost? I'd say not more than 100,000 drakes or so (don't recall what Tyrion paid exactly, but ~3 per person shouldn't be too far off, at least from what I get of the scarce info on prices, that should get the average mercenary quite a lot). By the time of ADWD, the crown is probably at least around 1.5-2 million in debt to the IB. So even if you add expenses for shipping and logistics, you probably wouldn't get to much more than about 10% of the original debt which, for the moment, is completely depreciated for the IB - and you'd get a chance to recover it.

Now if we accept that Stannis's chances are quite grim, though, and also assume (which is likely) that the IB knows this as well, there must be more to the whole thing. Now the IB is pretty big, afaik the biggest bank in the WoIaF by far. This probably allows them to issue some kind of paper money, and I assume this is what the crown ultimately got. With this option, the bank can reap great profits by expanding its balance sheet and lending out more credit than they actually have deposits. This is what is common in financial markets ever since there's been something like "proper" banks. With this process comes term transformation, as deposits are usually short-term, while banks tend to lend a lot long-term. Probably the same in the WoIaF. Merchants have their deposit accounts for balances @ the IB, and the IB lends e.g. to governments like that of Westeros.

So, the IBis really big, but how big can it really be? If one of the world's biggest banks today held 25% of the U.S., German or Japanese government bonds, I don't really see that bank surviving if the states were to default. It would run illiquid, there'd be a bank run etc., and the bank itself defaults. Now, as I said, the IB is big, but I don't really see it possibly being big enough to be able to survive a default of a huge nation like Westeros of which it holds a big part of the debt - at least not if any other shock occurs.

So to sum up: the fact that the IB has lend so much money to the Westerosi government, and the problem that they basically refuse paying, may pose a liquidity problem or at least get the bank close to one so that any further shocks (e.g. merchants nervously drawing their deposits because of wars everywhere now, preferring to hoard gold coins) might tip the scale. Since illiquidity would spell disaster, the bank needs to avoid this at all costs, and while the menace still looms, at least provide the impression to the public that its doing everything to get its money (I suppose the loans would be paid back in coin) back.

Sorry if parts happen to be confusing, I'm really tired right now, so if anything's not clear, please ask ;)

Damn if you can come up with a post like that when your tired.......I would love to see what you can do when your well rested.

Truly great post

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It is highly probable that the Iron Bank is aware of the lunacy going on in King's Landing and how the stability of the present power structure in the capital is on the cusp of crumbling. The question of Aegon remains unanswerable yet. Either they did not know about him or they do not support him and prefer Stannis. It may also be that the availability of sellswords will broadened if the siege of Mereen is ended soon.

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Part of Stannis's reputation is based on the fact that he lured the Iron Fleet into a trap during Balon's rebellion. That plus the defense of Storm's End and the capture of Dragonstone during the uprising against Aerys.

The defenders of King's Landing during the Battle of the Blackwater would easily have been defeated had not Tywin arrived with massive Tyrell-Lannister forces. The city's defenses were shattering and the Goldcloaks were starting to turn on each other and slaughter their commanders. However, the army that came with Tyrell-Twyin army was more than twice as large as that brought by Stannis to siege the capital. There probably was not any strategy that could have reversed that situation, especially considering the fact that his own force was outside the city conducting a siege and much of it defected almost immediately upon seeing the Tyrells. The problem was that he did not anticipate that Tywin might quickly return or that the Tyrells might end their neutrality by assisting the Lannisters.

So far the only known money the Iron Bank has spent on Stannis's cause pertain to the loan to the Night's Watch (probably minor by the IB's standards) and the recent money to hire sellsword companies. They probably won't outright hire Faceless Men to assassinate targets but they might use their clout to put in the word that the FM should strongly consider taking on missions helpful to their political goals in Westeros. Neither the Tyrells nor the Lannisters will ever have stable rule over Westeros which means that repayment will never happen as long as they technically control the throne. The Iron Bank is probably planning to spend as little as possible, preferring instead to give Stannis's foes a few final pushes into self-destruction.

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If the Faceless Men are "involved", and or "hired" by the Iron Bank, then that could be one possibility (out of the many possibilities), on how Arya gets back to Westeros.

If the Iron bank asked the FM to take out a hand full of the "major players", opposing Stannis, then it could make sense why the would want Arya on that job. She is very familiar with Kingslanding, remember all the secret places she found out about, when chasing cats for Syrio Forel??? Maybe she mentions this to the Kindly Man, and he suggests she could be useful, so that's how they justify taking someone who hasn't finished their "training"???

Also Stannis has enemies in the North, the Kindly Man knows that Arya is a Stark. Maybe they get sent in to take out Roose Bolton inconspicuously??? Thus leaving Ramsey to do all the "heavy lifting", when it comes to destroying all of Roose's careful planning/back-stabbing. Result being.....no one knows the FM were ever involved.... Isn't that basically the FM trade mark???

Many readers already believe that the "letter" from Ramsey to Jon, shows signs of panic and distress. If Roose was dead that could cause Ramsey to be panicked and distressed, knowing that he is screwed without Roose.

And a lot of those same readers believe that for Ramsey to have written the "letter", then Roose must be out of the picture by the time Ramsey writes "said letter".

I'm not going to get into why some readers believe this, but maybe my scenario gives that Theory some merrit????

Lol or am I the one chasing cats here????

Feel free to shoot down anything I posted, I'm not really one for "crackpot" theories, but I'm pretty sure this post counts as one.

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Here's a theory: Littlefinger is in league with Varys, and bankrupted the Iron Throne intentionally to help Varys' claimant, Aegon, gain more support. Aegon may not be willing to pay off the debts made by the Baratheon/Lannister regime, but he would likely be more prudent to deal with in future situations. This supports the whole idea of ousting the indebted ruler in favour of someone else.

It also figures in with what LF is doing with Sansa: currently, she is the sole claimant to the North (everyone thinks Bran and Rickon are dead, Arya as well, and she's younger anyway), he is setting her up as heir to the Vale, and if Edmure dies, the Riverlands pass to her as well. If everything works out, Sansa controls three of the seven kingdoms, from the North, down.

Meanwhile, Aegon comes from the south. It looks like he has Dorne's support, he's taken Storm's End, there is speculation that Highgarden is on it's way to treat with him. The Lannisters are weakened, hated by the public, and possibly poor. If Aegon marries Sansa, it would unite the North with the South, and hopefully bring a sense of stability to Westeros, which is what Varys claims to have been wanting all along.

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Littlefinger cannot set up Sansa as heir to the Vale except by marrying her to someone who has a claim to it - Sweetrobin or Harry the Heir. And even then she would not really have a claim to the Vale, even though her children would have a claim. That would interfere with any other marriage plans for the foreseeable future.

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Littlefinger cannot set up Sansa as heir to the Vale except by marrying her to someone who has a claim to it - Sweetrobin or Harry the Heir. And even then she would not really have a claim to the Vale, even though her children would have a claim. That would interfere with any other marriage plans for the foreseeable future.

What happens when Sweetrobin and Harry accidentally die in the next two books? Does Robin have yet another cousin that I don't know about, besides Sansa? Her claim through Lysa is weak and untraditional, but if there is nobody else left to claim the Vale, why would they not go with the cousin and wife of the most recent direct heir? Especially if she manages to endear herself to the Vale, aided by promises of protection, which she can back up as ruler over the other northern Kingdoms.

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harrys mom had an older sister who was taken on the east road by the burned men when she was on her way to the riverlands to marry a Bracken. Since this sister was older her child(if she had one,if she lived),would have a better claim.The Vale probaly wouldn't want to have a lord that was raised by the mountian clans and an abducted mother. Might be an issue in the next book.Littlefinger mention this in passing when telling Sansa why Harry is the hier. Only mentions the abduction AFFC Sansa 3

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harrys mom had an older sister who was taken on the east road by the burned men when she was on her way to the riverlands to marry a Bracken. Since this sister was older her child(if she had one,if she lived),would have a better claim.The Vale probaly wouldn't want to have a lord that was raised by the mountian clans and an abducted mother. Might be an issue in the next book.Littlefinger mention this in passing when telling Sansa why Harry is the hier. Only mentions the abduction AFFC Sansa 3

That's the story... what if Varys abducted the girl like he (presumably) abducted Tyrek Lannister? It could be about marrying them off to Golden Company exiles seeking to return with Aegon (Blackfyre!), in order to assure a powerbase in Westeros, and/or hostages so the great Houses don't fight back once the Blackfyre coup happens.

Or maybe it's the Iron Bank abducting heirs, as hostages to one day get their money back, or the Faceless Men for whatever dark purpose they have in mind.

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What happens when Sweetrobin and Harry accidentally die in the next two books? Does Robin have yet another cousin that I don't know about, besides Sansa? Her claim through Lysa is weak and untraditional, but if there is nobody else left to claim the Vale, why would they not go with the cousin and wife of the most recent direct heir? Especially if she manages to endear herself to the Vale, aided by promises of protection, which she can back up as ruler over the other northern Kingdoms.

harrys mom had an older sister who was taken on the east road by the burned men when she was on her way to the riverlands to marry a Bracken. Since this sister was older her child(if she had one,if she lived),would have a better claim.The Vale probaly wouldn't want to have a lord that was raised by the mountian clans and an abducted mother. Might be an issue in the next book.Littlefinger mention this in passing when telling Sansa why Harry is the hier. Only mentions the abduction AFFC Sansa 3

Sansa has no claims through Lysa. No legal claims. She might have had a claim if Lysa had inherited, and declared her the heir. But Lysa didn't inherit, Sweetrobin did. Lysa was just his guardian. If Sweetrobin dies, Harry will inherit next. This is also made clear, it is why Harry is Harry the Heir. If Harry dies after he becomes Lord of the Vale, it would be his next of kin who inherit. He has two bastard children. Bastards don't inherit usually - unless there are no legitimate heirs left. WHich might very well be the case in the case of the Arryn family. Sansa doesn't come into this anywhere unless she tries to claim the Vale by force.

But maybe I'm overlooking something. When the question of the Robb's heir came up, Catelyn Tull mentioned a distant cousin, some distant relation of the same lady who raised Harry the Heir. I would not be surprised if Harry the Heir to the Vale turned out to be the missing Stark heir. In that case, Sansa could claim to be his heir if he dies after inheriting the Vale. Littlefinger never told her why Harry was called Harry the Heir, she deduced that he is Sweetrobin's heir by herself. He might very well know if Harry has Stark blood, and just decided that Sansa didn't need to know.

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Uniting the north with the south.... isn't that what happened to end (the inspiration for this series) the War of the Roses?

The Wars of the Roses were more a contest over who had the most legitimate claim to the English throne, mostly because Edward III had six sons, all of whom managed to have kids of their own. But the main belligerents in the Wars of the Roses (the Lancasters and the Yorks) were both situated in northern regions; neither were from the southeastern area of England where the political centre was.The unity of the North and South didn't happen until James I (or James IV of Scotland) took over like 200 years later.

It's funny that you bring up the Wars of the Roses though, I'm studying it right now for school, and can't help noting the similarities between the Lancasters and the Lannisters... Probably not boding well for Lannister haters, seeing as the winner of the Wars of the Roses were the Lancasters (Henry Tudor, duke of Richmond, who would be Henry VII, first Tudor king, father of Henry VIII).

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Stannis couldn't beat an army that was 1/10 the size of his at kings landing. He got his reputation from sitting in Storm's End during a seige, which is apparently one of the harder forts to take and the opposing commander was another assclown.

This is nonsense, frankly. He got his reputation from Storm's End AND smashing the Greyjoy fleet (via a plan of his own devising). He also has had quite a bit of success in the North, relatively speaking (meaning it looked bad for him but his star is on the rise again, bigtime).

Also the 1/10th comment is blatantly false. Tywin's army showed up with all the power of Highgarden, with fake Renly at the head, and that's when they lost. Up to that point Stannis was winning, despite the wildfire and other factors.

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Yeah, in my opinion, the Iron Bank being willing to make loans in that amount is only slightly more absurd than the premiss that Stannis could actually buy a mercenary army large enough to even become competitive for the crown. You can rationalize it how ever you want. They want to preserve their reputation and he is the best candidate for them to get any money back, but I just find it unbelievable: wasted pages on a stupid idea.

If the Iron Bank thinks Stannis can win, that kinda tells us that he does have a real chance, especially with their money. They aren't stupid, they know he's going to use that money to hire sellwords. If there weren't enough sellswords to be had, the IB probably knows that as well.

You're basically saying this concept is stupid because you know more than you do. You don't know the level of debt, nor the level of cost to hire a sellsword army etc. These are all hazy details. We should assume it makes sense because *intelligent characters in the books think it makes sense*. If Stannis starts to win, lords will switch sides. This has already happened. Manderly wants to join Stannis, and that's huge. The North for the most part would love to depose the Boltons so many other northern lords may yet change sides. And what if Stannis restores Rickon to Winterfell? Oh my the North would really be on his side then, (unless they somehow go back to the whole Stark King in the North business).

The IB doesn't know Rickon and Bran are alive. From where they are sitting, Stannis is actually in very good shape, assuming he has their support, which counts for a TON.

To be fair you may be right in that it's ridiculous, but I don't see how such a judgement could be made with such incomplete information on the financials and other things.

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