Banks in DnD

[Al'Kelhar]

The function of a bank is to facilitate trade and economic development, not to store valuables. Any schmuck with a solid door and an armed guard can store valuables. IIRC banks developed out of the desire by the great merchant houses of the Italian rennaissance to develop costly trade routes. Not enough money to finance your venture by yourself? Get in with a few rich mates to finance it and you all share the profits of the venture. Pretty soon this works up to "give your money to us and we will use it to finance our risky venture from which you may or may not receive a return". Then it's "give your money to us and we will guarantee a small return on it, while we lend it to someone else for the potential of a bigger return with bigger risks". Etc.

If your campaign world has complex and sophisticated trade a la Rennaissance Europe, then it will probably have people performing these banking functions, whether they call themselves banks, money-lenders, or "friends". FR probably fits this description.

PS, it'll probably have the equivalent of insurance companies, too.

Cheers, Al'Kelhar

 

[Xarlen]

I don't know what country or religion it was, but they had Coin exchanges in the temples.

And, if someone has the stones to rob a church, then surely the shrine/temple/whatnot is going to have someone to send out. Divine Seeker anyone?

 

[Mean Eyed Cat]

I stole this idea a while back - I can't remember where (possibly another forum), but I will give credit to "Sarta."

Quite often large trading companies will write vouchers for cash for those traveling almost always for a fee.

So, if in your world there is a trading company that operates out of two distant cities, it might be possible for people to buy trade notes from the company in one city and then redeem it for cash from the company in another city.

I would charge somewhere around 10 percent for this service. The note should be fairly detailed and difficult to forge. The npc's in charge of redeeming these should also have a decent forgery skill in order to verify that the notes traded in are legitimate ones.

Also remember that these vouchers are not always redeemed immediately. Quite often, a merchant may not be able to fulfill a voucher on the spot and will request a few days to come up with the cash.

 

[Zhure]

My favorite fantasy bank scenario:

Popular church offers to sponsor a young knight as he travels across the continent on a pilgrimage or quest. As he is relatively unproven they can't afford to grant him any actual cash, but they will safeguard his valuables. They offer to hold his assorted monies at their well-guarded main temple and give him a writ that he can redeem for similar amount in value in the distant lands to which he travels.

The young knight agrees, travels with his writ to the faraway lands and presents it there. Once they've spent a few days magically confirming the funds are available, they offer to keep the bulk of his money in the event he's caught by infidels and needs to be ransomed.

The church makes money if:
- the knight dies in transit
- the writ is lost
- he's killed instead of captured.

Even if the knight has more wisened friends to point out the pitfalls, as long as he agrees to the deal, the church can make money loaning virtual money out with usury (much like modern banks). They offer promissory notes for more money than they actually have and gamble it all won't be called on the same day.

By charging 1% interest on 100,000 gold, when they really only have 10,000 gold, they make 1,000 gold per year. As long as no more than 10,000 is withdrawn at any given time, they can quickly amass large sums of money.

(This was allegedly done by the Catholic church during the Crusades.)

That being said, I am not a fan of modern banking schemes in a fantasy world. I do see the use of ring gates or permanent teleport circles as being a way for magical money between two sites. It would allow for "chains" of moneylenders to exist.

 

[Tonguez]

Yeah Banks started as stated above to facilitate trade and originally this meant that they acted as Insurers and amongst other things issued Bills of Exchange.

eg Merchant A is going to City X to sell his wares. In City X he gets 20000gp which he then takes to the Merchant Guildhall and Banks it. The Merchantguild gives him a Bill of Exchange saying that when he gets home to City A the Guildhall there will pay him his 19000gp (less 1000 for cost which is cheaper than having the lot stolen by Pirates or lost in a storm).

Now the Merchant Guildhall X has 20000gp which they invest in sending ships to the Far East to bring back a funny brown starchy tuber which aught to make great chips.

I use these kinds of Bills of Exchange and also Notes Exchequer (Government Cheques) all the time in my more 'civilised' campaigns and of course the whole Merchant tie-in makes great adventure fodder

I haven't thought too much of 'fantasy' security systems but it shouldn't be too hard for a Church or wealth Guildy to hire someone to create them their very own Subdimensional vault, have in fully alarmed and guarded and have all monies banked with them auto teleported to this central fund.In fact this fund could be so well guarded that it is never touched or even seen! and while a Gold Standard is used as a measure, ONLY Bills and Cheques are actually ever passed between the hands of mortals...

 

[Eben]

Thanks for the history lesson, Tonquez!
Actually these Bills of Exchange did not represent an amount of money, but trade goods. For example: a merchant of Venice wanted to buy cloth in Bruges. But of course, he didn't travel with all this money, so instead he would write a note saying the seller could have the cargo of pickled olives he had in Genua. If the exchange seemed worthwhile to the seller, the goods would change hands. So now our merchant in Burges could sell the goods in Genua, collecting the money over there or exchanging the note for yet something else.
This could get quite complicated, so eventually the great merchant houses would have people managing these things in the major cities they traded. Thus banks were born in medieval Europe.
(correct me if I'm wrong, I've been out of it for a few years.)

 

[Talvisota]

Try taking a lesson from developing countries, too.

Banks in the FSU charge on withdrawl, so you put in cash, they use it as collateral or leverage or whatever business they are doing, and when you withdraw, you pay a percentage of the amount withdrawn as a fee.

Say a party stores 1000gp of coins, and later needs to withdraw 600. The bank charges 2%, say, and after the withdrawl of 600 you have 388gp left in the bank. 12gp was the 2% fee.

A simple system I use IMC that works well.

 

[Hand of Evil]

I use a merchant guilds/trading company, players invest for a return after a period and as long as the guild/company has a office in a location they can withdraw or deposit against their stocks.

Oh, their are mason jars!

 

[drnuncheon]

It's not strictly banking, but the Temple of the Merchant God in my Freeport campaign issues what amounts to paper money - each one being worth a certain amount of clerical spellcasting. At first they issued them as payment for various goods & services during a time of cash crisis, but rather than redeem them, the certificates tended to be bartered to other people in lieu of cash. The temple knew a good thing when they saw it, and proceeded to essentially make privately backed money. This led to some problems with the Empire, but the combination of the threat of a crippling trade embargo and significant pressure from the wealthy members of society (who didn't want to see their new money become valueless) made the Emperor blink first.

J

 

[Hand of Evil]

Thread had me searching...

http://moneyethics.com/Articles/banking.html

While not of great detail does show that a fantasy game should have a banking industry!