Post/Author/DateTime	Post
Cuaglar 01-25-06, 11:45 AM	I would like some advice on how to run a banking organisation, because it must get really annoying to lug around about one hundred pounds of dragonloot all the time. I was either thinking of the system the Templars used, a one-time 'gift' to store your wealth and valuables, or a more ordinary bank system that... Well, actually I don't know how ordinary banks work either.
Illion the Red 01-25-06, 11:53 AM	Modern banking: I don't think you want to go to a full commercial and investment banking model in a D&D setting - just too much work. You can, however, use a simple model. Banks make money by taking money in from people and offerring them a low interest rate return on their deposits. They then take these deposits and leverage them to make loans at higher interest rates to other people. This way, they make more money in interest than they pay out. The truly elegant part is that they only keep a portion of the deposits on hand and, in the end, wind up lending out the same deposit out to several different parties, making interest on each of the transactions. The danger, however, is if everyone who has a deposit asks for their money all at once. The bank doesn't have the cash on hand to handle that and will collapse.
Cuaglar 01-25-06, 11:59 AM	Okay, I don't think the players would mind if I don't have an overly elaborate banking system. I think they can just store their gold at, about, 5% interest, and 10% interest if they want to borrow gold. Does that make sense?
ILEC04 01-25-06, 12:01 PM	You could establish a system somewhat along the lines of how paper money evolved in the real world. Merchants/Artisans etc - those who were known to have large amounts of cash and good credit would store gold and other valuables for their owners and in return provide a letter promising to deliver to the bearer of the letter the gold and valuables that were held in storage. Since the letter was not specific to the initial depositer and could be used by whomever happened to have it in their possession - such letters rapidly became used as currency - it made perfect sense - why load your gold on a ship in London and sail it to Amerstdam in order to buy goods there when you can more easily and cheaply bring a letter of credit to be drawn on a merchant in Amerstdam.
Neverwrong 01-25-06, 12:05 PM	Nyeh, just use the eberron thingy.
Cuaglar 01-25-06, 12:09 PM	This world isn't really advanced enough to be psuedo-rennaissance; it's a lot like medieval Europe in the thirteenth century, with an almost monotheistic religion. And I don't know the Eberron banking system.
Mirage_1 01-25-06, 12:17 PM	I seem to recall when banking was in its infancy, that you paid for the bank to store your money and probably paid to withdraw I would probably have something like 5% charge for every transaction therefore deposit 100 gold = 5 gold charge take 100 gold out in next city = 5 gold charge Basically, you are paying for the safety. The only tricky part is on verifying the money. Origionally, you were given a "note" saying how much you deposited. You then turned in that note at the other bank to get the money. he problem of course is with forgery. This is even more so in dnd where you could have magical forgery. In a low magic world...no prob in a high magic world..may need a purty powerful magic item to verify depositor..sorta like a biometric system. Note - all of this is off the top of my head, so I may be wrong on historical commentary
Tzor 01-25-06, 12:21 PM	It all depends on what you need your banking system for. The notion that you don't want the players to "around about one hundred pounds of dragonloot" (and assuming that is one hundred pounds of gold coins we are talking about a minor amount of 5,000 GP) seems to imply the ability to spend money in city A based on deposits in city B. This can be done in a number of ways, and all of them risk the potential of being forged. The use of such promisory notes (although they technically don't have to be notes) can be issued by either banks or governments, and can be backed by a number of resources. (The United States government used to issue notes called gold cirtificates and silver cirtificates that were redeemable in either gold or silver.) Assuming their validity could be assured, these notes would be as dependable as the bank or government that issued them. The problem is whether or not any such method is indeed worth the cost. Since forgery is possible, such notes (especially in a metal coin economy) would not be legal tender, only tender among banks and governments that can validate the notes and would require conversion to the local coin in order to pay local shop keepers (in addition the notes would probably be in large denominations only) and the conversion to and from the notes would probably have a fee involved. A pretty hefty fee. If you simply want to "deposit" your money in a safe location and always go back to that location to get it, there might exist deposit banks that will store your coinage and even other valuables ... for a price. After all, such valuts are vulnerable to thieves and protection is not cheap. In addition they may have forms to allow your "deposit" to be given out as loans to others allowing you to collect a portion of the interest but also assuming a significant portion of the risk, especially if the loan defaults. Allowing your coins to be "loanable" would also make those coins less "liquid" meaning your ability to withdraw might be severely limited.
Neverwrong 01-25-06, 12:23 PM	The Eberron system involves House Kundarak and their Dragonmark. Coins go in, gems and/or letters of credit come out(Portable wealth) . You can withdraw money from any major outpost of theirs and they also have a magical vault system that allows you to transport the swag through the outposts(costs 10gp a day).
Cuaglar 01-25-06, 12:27 PM	Okay, thank you for all your help.
Missing Minds 01-25-06, 12:39 PM	Try something like the Knights of Templar did. Scroll down or search for "The Templar Bankers" They helped to set the groundwork of modern banking if I remember right. Knights of Templar (http://www.ordotempli.org/history_of_the_knights_templar.htm)
Dyrcona 01-25-06, 12:39 PM	Good points made above. I've toyed with using a "letter of credit" banking system where a large merchant house will take hard currency or other valuables and issue a note to the PC that indicates the value that the PC has on account. These letters would have a magical seal on them to vouch for their authenticity (perhaps using the arcane mark spell). The letter could be redeemed in whole or in part for goods or gold (if enough is on hand) at any of the merchant house's outlets. Another idea that I had was to institute a sort of reserve banking system where the sovereign would issue notes (conveniently called pound notes) promising to pay the bearer 1 pound of gold or silver or whatever, depending on the type of note. The issue of forgery would come up, but in a world with magic there are things that you can do to prevent this. These notes could be used in trade, but not to pay taxes, much like trade coins. Finally, why not just make the PCs responsible for hiding their hoard? They could hire guards, build dungeons, etc. Heh, maybe they could be the object of NPC monsters' and thieves' plots to lighten their burden a bit?--I know I've done this from time to time to my players. Have something valuable stolen from the party while they're in town. I usually give them a chance to recover it, though. These always make for insteresting side plots. Actually, come to think of it. My regular players' characters almost always tried to establish some kind of homestead or mini-stronghold to store their loot. They found that golems make for the most reliable guards.
Pandaemoni 01-25-06, 12:40 PM	I wouldn’t lend gold in this game unless the characters put up substantial collateral (and put "put up" I mean give to me to keep until they pay me back). The only exception is land, on which you actually might be able to place a mortgage. There would be no effective security interests in personalty. Interest is much the same. Medieval Europe had laws prohibiting the charging or paying of interest (based on the numerous Biblical prohibitions against it). The Greeks and Romans also condemned charging interest though it was legal in both cultures (merely considered unsavory). Loans in Europe were eventually made between noble families (i.e. those with land to use as collateral) and charged interest. The collateral and mortgages were key, as it was the only real assurance you had of ever being repaid. Certain other banking services would be more easily established. The Knights Templar, for example, had a deposit system for money and items. You would take your valuables to the local Templar commanderie where it would be stored. They would give you an encoded chit detailing your goods. If you needed money later you could take your chit to *any* commanderie and get it from them (which they would note on your chit). In essence the chit was a "debit card". The Templars never paid interest on those deposits, of course. They did practically speaking charge interest on loans they made, though they did so by means of what today are called "synthetic leases". If you needed a loan, you would sell them your land for a purchase price equal to the amount you wanted to borrow). They would "buy" your land for that amount and hold title to it, but lease the land back to you. The "rent" would be equal to the interest you'd otherwise pay. A the end of the lease term, you'd "re-purchase" the land from them. If you fail to pay rent on time...they own your land and would simply evict you and move in or sell the land. The practice of *paying* interest on deposits arose because banks wanted to encourage people to make deposits (so that bank can make more loans). The problem is that public deposits like that raise the specter of bank failure. It's not like banks keep your gold in a vault in the back...they lend it to other people and are entirely reliant on those other people repaying the loans (with interest) to get that money back (and turn a profit). Further, you, Joe Adventurer, have no way to check the credit worthiness of the bank, as there are no modern financial statements (let alone deposit insurance). Banks would have to be run by well-known (and wealthy) families or you are just begging for them to become insolvent...and if they are wealthy, they do not need your money to make loans, they can use their own.
madd0g200 01-25-06, 12:55 PM	I like having a banking dimension. All banks are equiped with magical safety deposit boxes that function sort of like a dimensional pocket that leads to the banking dimension. As long as you have the key to your box, you can access anything stored in the deposit box from any bank that is properly equipped. You can even use a kind of dimensional ATM, by having magical chests laying around in those places far from civilization, that will also open with the deposit box key.