The Case for a Central Bank in Westeros

Marian Daniells

Senior Account Manager

To start: This post assumes you’ve read the books, spend your free time exploring A Wiki of Ice and Fire (no? Just me?) and/or are up to date with the HBO series. We won’t get into too many show or book details, but you’ve been warned. Spoilers are coming.

Almost all of the main characters in “Game of Thrones” are wealthy. Let’s start there. They typically come from high-ranking families that have been around for centuries, and their power and wealth is often reliant on taxes, labor and commodities like metals or food. But even within powerful houses, financial wellbeing varies.

The Starks, though powerful and able to collect taxes from rich Northern families such as the Manderlys, are not really cash-rich. The northern sub-economy relies on honor, favors and barter. It’s old-fashioned. (Learn about different economic systems via this season 1 Wall & Broadcast episode).

Meanwhile, the economy in King’s Landing is, accounting for the setting, much more modern, based on the physical exchange of coin money for goods and services. This money is mostly commodities-based. It has intrinsic value because it’s made of material (gold, silver and copper) that itself has value, typically mined from the westerlands. Given that the Lannisters rule the westerlands, it should come as no surprise that Cersei Lannister sits on the throne.

But then again, the Lannister mines dried up. Tywin loaned money to the crown, effectively buying it. And now that his lineage sits on the throne, they have no means of collecting on that debt.

So, to continue funding the crown, Tywin and his team borrowed again. From the Tyrells (who also effectively bought a crown, even if it later melted in wildfire), from the Faith of the Seven, and from the Iron Bank of Braavos. A foreign bank, across the Narrow Sea, effectively owns a stake in the Westerosi crown. This is where it gets interesting.

Why doesn’t Westeros have a central bank of its own? And what would happen if it did?

It’s easiest to dive into the why. Westeros doesn’t have a central bank because having one would mean taking the power away from the most powerful houses. The role of a central bank is to not only provide financial and banking services to governments, but to provide a commercial banking system, to establish and (at least attempt to) enforce monetary policy, and to issue currency.

In Westeros, the Light of the Seven often served this role, lending money to lords in need. The Lannisters too loaned to fellow lords. For those in power, there’s little need or appetite for a central bank. Why voluntarily give up power to another institution able to set policy? Why give up income from usury? Why provide lower classes access to capital?

The only way that a central bank would make sense in Westeros is if the majority of powerful houses lost all their fortune, and together colluded to overpower any still-wealthy houses to create a centralized bank, to which all citizens paid taxes and from which all of the Seven Kingdoms could draw budgets. This would likely include a simultaneous shift in government structure and policy. If all citizens pay into a central organization, rather than just their houses, then they would have the leverage to obtain more power. Additionally, two warring Kingdoms or houses can’t both fund their war from the same bank.

Economist Adam Ozimek wrote for Forbes on this topic and interestingly concluded that having the Night’s Watch operate a central bank could be a solution as well. Again, I don’t think the lords of Westeros would ever let that happen except in the above instance, but worth a share.

A central bank in Westeros would be a good thing for the realm.

A centralized bank would be the one institution in Westeros working for the actual people. I mentioned before that all of the main characters are either themselves wealthy, or (like Bronn, Davos, Gendry or Lord Varys) have wealthy friends. They have friends in powerful places paying them well, doing them favors, advocating for them. The poor don’t.

You could argue that the Light of the Seven advocates for them, but their support comes with strings attached. Some of the more honorable families may be helpful. But that advocacy can boost morale, opportunity, and subsequently the broader economy.

A centralized bank with a commercial banking system would mean that laypeople have comparatively fair, comparatively equitable access to capital. Instead of seeking patronage from wealthy families or loan sharks (loan dragons?), entrepreneurs could work with the bank to finance businesses. Access to capital is a catalyst for innovation. Westeros could unlock its creativity if economically disadvantaged and socially maligned citizens felt they had the means to pursue it. In Westeros, you have to have money or power to access more money or power. The wealthy families pursue upward mobility through marriage or war. Or, in Littlefinger’s case, through sheer politics. For the lower classes, money and entrepreneurship opens new doors. That’s a good thing for Westeros, but a bad thing for the lords.

One final case for a balanced solution.

George R.R. Martin’s companion history book for the series, The World of Ice and Fire, explains that the Iron Bank of Braavos was founded by sixteen men and seven women who hid their valuables in an abandoned iron mine shortly after the foundation of Braavos. As the iron mine’s chambers filled with treasures, a bank was formed to utilize the wealth.

There’s nothing to stop the lords and ladies of Westeros from pooling their assets and doing the same. In this way, they could stabilize their own economy, boost business and jobs by offering capital to peasants, generate additional income from usury, and limit reliance on the Iron Bank. But then they’d still have to stop with the infighting.

And that would mean that there’s no more storyline, no more Game. Apparently, in the Game of Thrones, you win or you die. Or you create a central bank and fix the shit economy.

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