Economics in Game of Thrones: The Iron Bank Always Collects

The power of bank in Game of Thrones contrasts greatly with banks in real life to suit needs at the time of era

By Sarah Munn, Staff Writer

In the Battle of Blackwater, Queen Regent Cersei Lannister hid with the ladies of the court in her castle. With them was a knight, his purpose cruel and singular — if the enemy wins and pillaging starts, the knight will kill all the ladies. Death before dishonour.

But thankfully, that did not happen. Reinforcements arrived at the last minute, and King’s Landing was saved.

That was where the TV series Game of Thrones left off last year. King Joffery, Cersei’s son, held on to his throne despite the immense opposition.

But the bum on the throne will sit uneasy in the series’ new season premiering tomorrow night (March 31). And that is sparked in part by a source scantly mentioned in the series — the Iron Bank of Braavos.

“The Iron Bank Will Have Its Due”

Never heard of it? Don’t be surprised. The Iron Bank is only mentioned once in the book A Game of Thrones, on which the first season is based.

Its next mention comes in A Feast for Crows, the fourth book in series A Song of Ice and Fire by George R.R. Martin. The third season, premiering tomorrow, is based on the third book, A Storm of Swords.

So it’s pretty fair to say that the Iron Bank will see no mention at all in Game of Throne’s third season. But that cannot be said about its influence. The Iron Bank wields immense power — many times that of modern banks.

According to the books, the Iron Bank — based in the land of Braavos — has a fearsome reputation. There’s a common saying among the Braavosi: “The Iron Bank will have its due.”

It loans money to whoever is on the Iron Throne as necessary, but if the monarch defaults on his debt payments, the bank will fund an enemy’s rebellion. Once in power, the new leader will have to repay the previous debt along with whatever he got from the Iron Bank.

Monarchs climb to the Iron Throne with Braavosi debt on their backs. It’s a messy business all in the name of power.

In the first book, Ned Stark, then Hand of the King, notices an immense debt owed to the Iron Bank — the first sign of trouble. Lord Petyr Baelish, Master of Coin, incurred it to cover then-King Robert’s huge spending.

And in the third book, long after the death of Robert, Cersei decides to default on payment.

But, but, what about that unofficial family mantra, “A Lannister always pays his debts”? you ask. Well, either Cersei’s got something up on of her silky sleeves and really does plan to repay the debt later on, or she just doesn’t care.

Cersei told an Iron Bank representative that she will only repay once all rebellions are crushed.

And that move turned out to be rather unwise. The Iron Bank recalled all outstanding loans — causing a minor economic crisis while it’s at it — and started funding Cersei and Joffery’s demise.

And we’ll stop there in order to not spoil things. The Iron Bank story arc isn’t even resolved in the books yet; it’s safe to say that it will have a bigger role in season four onward.

Not in the Real World, Though

But one thing is sure — what happens in Westeros stays in Westeros.

“Nothing like that would happen in our world,” says the historian Ken Mondschein. In the real world, banks are “not that powerful.”

“It’s for drama.” Having such a mighty group of financiers makes for a great story element, says Mondschein, author of the paper Down and Out in Westeros.

On how the Iron Bank has amassed its strength, Mondschein says:  “They’ve built up a lot of wealth and capital, they’re very organized and they have access to Faceless Men (Braavosi assasins).

“That enables them to actually exert more political influence than bankers are able to exert in our world. They’re able to use the conventions of the fantasy world, but even more so, they have strong institutional structure, which is not the sort of thing you would find in medieval to early-modern banks.”

Banks in our medieval and early-modern eras were significantly smaller and often family-run, meaning there were many more personal connections. Rounding up an assassin to murder the guy who bakes bread for your sister-in-law just wasn’t that easy.

Of Banks and Wars

But despite that unrealistic element in the story, there are some similarities we can see between Martin’s world and ours. One of the most obvious is the connection between banks and wars.

According to the University of Calgary’s Applied History Research Group, “the greatest danger to medieval banking was in granting loans to European monarchs to finance wars.”

Mondschein echoes this claim. He says the 14^th and 15^th centuries of our world are good examples of this, when a rise in infantry-based armies was seen and huge supplies of money were needed to fund them.

“In that sense, Martin’s world is very realistic,” he says.

In Down and Out in Westeros, Mondschein writes there’s evidence that the Game of Throne’s economy is fully plausible, especially in terms of everyday sales.

“Since no one wants to carry around bags of gold and silver, most likely the Dragon (Westerosi currency), like the Ducat (former European gold coin), was primarily a money of account —  in other words, paper money, given as a document called a “letter of exchange” that entitles the bearer to a certain amount of cash.”

Not for the Common Man

This method later developed into more advanced credit and borrowing systems, but it wasn’t easily accepted by everyone.

According to the academic John Munro, the idea of a mediaeval peasant using a bank is “a matter of considerable debate amongst economic historians.”

For people to use the banking system, they needed to understand it, says Munro, an economics professor at the University of Toronto.

And that understanding would not have been easy to achieve. Trying to convince someone that words and numbers on a bank ledger page could mean the same thing as a heavy, jingling bag of coins was no simple task.

With the societal parallels between that time period and the Game of Thrones world, it is safe to conclude many people there feel the same way about banking.

The series premieres on HBO at 9 p.m. EST. Grab a coat and some hot chocolate. Spring may have sprung, but tomorrow night, winter is coming.