Interplanar Banking

[atemu1234]

I want to make a bank that functions in the world of D&D. I want it to be omnipresent, so I'm thinking about making it be run by beings from the plane of Mechanus. Any tips?

[Naez]

Time runs differently on different planes so realistically calculating interest would be a huge pain.

[daremetoidareyo]

What banking features do you want?

Interest? The modrons have a few portals in their vault to protected regions in the paraelemental elemental planes of mineral, protected by dire xorns of legend. When you bring in your cash gold, you trade it for an equivalent amount of gems which are then added into little suspension matrices on the relevant plane. You want 2% increase in funds? For a flat 20GP fee (plus a waiver of ownership in the case of your death/destruction) we'll exchange your gold for topaz and plug it into the mineral plane. In exactly 6 months mechanus time, the topazes will have begun to grow and accumulated additional size. You want a 5% increase in funds, Rubies it is, 1 year term. The bank then uses the liquid cash generated by their crystal depositary (CD) system for loans and seed funding for smaller banks. Mechanus banks will only fund infrastructure projects of lawful creatures that are calculated by them to have a 95% chance of success and have a return on investment time less than 10 mechanus years.

Mechanus bank has auxiliary branches, one in archeron, and one in the outlands. The bank in archeron is run by the most intelligent devils. They have a gate to the main mechanus bank, where some soldiers and mercenaries deposit their blood war earnings, (which is quite profitable for mechanus, as few soldiers actually survive more than a few seasons.) The Devils however, are free to loan money using whatever criteria they desire, so long as they continue to pay the franchising fee to mechanus (something arbitrarily high 250gp/mechanus month). These devils trade in souls, powers, stolen goods, information, whatever, and readily make loans to people obviously unable to pay back in return for contractual geas into fighting the blood war for decades.

The outlands branch has a link to both of the other franchises. They send the desperate and evil to archeron branch, frugal savers to mechanus, and mostly work like safety deposit box functions like a swiss bank. An archon artificer will store your goods in little demiplanes that he has in the back room. This place is full of non-detection enchantment and is actually helped by the out lands itself. The demiplanes for storage allow no time to pass, and patrons pay extra for accelerated or normal time flow. The only rule is that any life, or sentient mind may not be stored unless it passes a fitness test: must consent and pass detection for compulsion features, etc. Storage in a demiplane costs a bunch, but individual wealth agreements can be made. There are 10,000 dead demons who have terms of payment coming up but won't pay because they're dead now, and the bank will auction off the goods to the highest bidder, goods include: An airship made of a hollowed out astral dreadnaught, 20,000 gallons of sulfuric acid, the left femur of 78 elves, 24 dwarves, 16 humans, and 1037 aasimar, the spell book collection of mad bublineepp; kuo-toa assassin/mage, etc. Participation in the auction costs a 10,000gp entry fee.

[Curmudgeon]

In the Medieval era quasi-simulated by D&D, charging interest for lending money was considered usury (http://en.wikipedia.org/wiki/Usury), a serious crime. Legal permission to charge interest on lent money for citizens wasn't granted in England until 1545. Before that time only governments (and religions, which had the same effective status as states) were allowed to borrow money to be repaid with interest. So the model for banks was that they would get the use of the money deposited and earn the interest for lending to state or church. In turn the depositor got protection against theft and the convenience of bills of exchange and banknotes (bank-issued currency) instead of having to haul coin around for large transactions.

[Extra Anchovies]

I feel like if there were an interplanar banking system, it would be based in Sigil and run by the Lady of Pain.

[Jeff the Green]

In the Medieval era quasi-simulated by D&D, charging interest for lending money was considered usury (http://en.wikipedia.org/wiki/Usury), a serious crime. Legal permission to charge interest on lent money for citizens wasn't granted in England until 1545. Before that time only governments (and religions, which had the same effective status as states) were allowed to borrow money to be repaid with interest. So the model for banks was that they would get the use of the money deposited and earn the interest for lending to state or church. In turn the depositor got protection against theft and the convenience of bills of exchange and banknotes (bank-issued currency) instead of having to haul coin around for large transactions.

That was a quirk of religion, though. There's no reason to expect that to be the case in any other setting.

[Curmudgeon]

That was a quirk of religion, though. There's no reason to expect that to be the case in any other setting.
It's not just because of religion. If governments are the only ones allowed to borrow with interest, their willingness to pay is what sets the rates. Not only do they get cheaper loans, they increase their financial as well as ruling authority by maintaining superior access to capital compared mercantile interests. It's all about power.

[EisenKreutzer]

In the Medieval era quasi-simulated by D&D, charging interest for lending money was considered usury (http://en.wikipedia.org/wiki/Usury), a serious crime. Legal permission to charge interest on lent money for citizens wasn't granted in England until 1545. Before that time only governments (and religions, which had the same effective status as states) were allowed to borrow money to be repaid with interest. So the model for banks was that they would get the use of the money deposited and earn the interest for lending to state or church. In turn the depositor got protection against theft and the convenience of bills of exchange and banknotes (bank-issued currency) instead of having to haul coin around for large transactions.

Thats all true, but you are forgetting that Jews were exempt from the usury laws, and the Knights Templar were also granted the right to take interest.

In D&D terms, perhaps only dwarves and certain Paladin orders are allowed to lend money with interest?

[Jeff the Green]

It's not just because of religion. If governments are the only ones allowed to borrow with interest, their willingness to pay is what sets the rates. Not only do they get cheaper loans, they increase their financial as well as ruling authority by maintaining superior access to capital compared mercantile interests. It's all about power.

It's hard to argue against this without breaking forum rules, but suffice it to say that the law against usury was set up by the church, non-Christians were exempted (hence the greedy Jewish moneylender stereotype), and there isn't another society that's banned charging interest.

[Necroticplague]

It's not just because of religion. If governments are the only ones allowed to borrow with interest, their willingness to pay is what sets the rates. Not only do they get cheaper loans, they increase their financial as well as ruling authority by maintaining superior access to capital compared mercantile interests. It's all about power.

Except for that being one of the least efficient means for a state to acquire wealth in power, as shown by every time period afterwards. When you make it so its difficult profit off of loans (and when you take into account possibility of bankruptcy of borrower, and inflation, the expected profit of a no-interest is negative), you make it harder for anyone to get a loan. As a result, there is less investment in businesses, start-ups, or R&D. Thus, little production growth. With not much production improvement, there is a hard limit to how much you can enrich yourself. You get way more bang for your buck by letting lending at profit occur, and then taxing the resultant growth of industry.

Also, the part about making loans cheaper isn't necessarily true. As pointed above, such policies lower incentive to go into banking, meaning that the supply will be low. Thus, while the state may go "lower rate, or I walk", the lender can equally go "this rate, or you're not getting anything". And lo and behold, he doesn't have much competition for you to go to to back up your threat, thanks to not much existing (due to how difficult it is to profit).

[Curmudgeon]

Except for that being one of the least efficient means for a state to acquire wealth in power, as shown by every time period afterwards. When you make it so its difficult profit off of loans (and when you take into account possibility of bankruptcy of borrower, and inflation, the expected profit of a no-interest is negative), you make it harder for anyone to get a loan. As a result, there is less investment in businesses, start-ups, or R&D. Thus, little production growth. With not much production improvement, there is a hard limit to how much you can enrich yourself. You get way more bang for your buck by letting lending at profit occur, and then taxing the resultant growth of industry.
You're absolutely right, but economic reasoning wasn't sophisticated in Medieval society. Governments believed that higher tax rates always resulted in greater revenues to the kingdom. Similarly, they thought that by keeping most of their citizenry from being borrowers they (the state) would get better loan terms. Being wrong on both counts delayed progress and kept society static for most of a millennium. However, that is the societal model that core D&D uses. (It's Dungeons & Dragons, not Merchants & Markets.) If you're going to add a banking system to the game, one that fits the social assumptions built into the D&D setting would be less jarring than one closer to our current understanding of economics.

[Jeff the Green]

You're absolutely right, but economic reasoning wasn't sophisticated in Medieval society. Governments believed that higher tax rates always resulted in greater revenues to the kingdom. Similarly, they thought that by keeping most of their citizenry from being borrowers they (the state) would get better loan terms. Being wrong on both counts delayed progress and kept society static for most of a millennium. However, that is the societal model that core D&D uses. (It's Dungeons & Dragons, not Merchants & Markets.) If you're going to add a banking system to the game, one that fits the social assumptions built into the D&D setting would be less jarring than one closer to our current understanding of economics.

Considering that half of the fantasy books I've read have borrowers paying interest and the other half don't mention borrowing at all, I'm fairly comfortable calling BS on this argument.

[Yahzi]

but economic reasoning wasn't sophisticated in Medieval society.
Some things never change. :smallsmile:

To be fair, there wasn't a whole lot of value in R&D start-ups in the middle ages. The entire economic base was essentially determined by the annual harvest. Remember that most mechanical power still came from animals and humans, so the amount of food you had was a straight cap on how much you could get done. The primary method of raising state revenues was either raising taxes or increasing the tax base - i.e. conquering other lands. Of course straight up robbery still worked too, because taking an army into hostile territory and stealing their gold could actually yield more gold that it cost to hire the army (unlike today - to make a D&D equivalent of a modern army, assume they all fight with wands so every single firefight costs you pounds of gold).

The middle ages did have trade: a single caravan or ship from distant ports could make your fortune. I find it hard to image D&D worlds have those kinds of trade routes; what with the dangers of the wild it just doesn't seem profitable. It was bad enough IRL and all they had to contend with were pirates and weather.

Finally, what currency are you going to trade in? Gold seems likely to have a fluctuating value based on technology: people with access to Umber Hulks or even Wall of Gold will value it a lot less than King Henry did, and half the orc tribes won't even want the stuff (like the early Germanic tribes) since you can't make weapons out of it. I suggest the only real currency is souls (an idea shared by Frank & K's excellent Econmicon, which I can't recommend enough). And even then souls are only useful if you can buy the one thing everybody in D&D land wants - levels. This is why my World of Prime setting uses XP as the international currency.

[DM Nate]

I feel like if there were an interplanar banking system, it would be based in Sigil and run by the Lady of Pain.

I don't know about RUN by the Lady of Pain, but there is a definite advantage in placing it in a central location where even gods can't just break in and enter.

[EisenKreutzer]

I feel like if there were an interplanar banking system, it would be based in Sigil and run by the Lady of Pain.

The Lady of Pain would never deign to run anything as banale as a bank.

[unseenmage]

There's a race for this IIRC called the Mercane. They're extraplanar merchants. They'd run an extraplanar bank.

In our setting we use them as the go-betweens to the extraplanar wish granting entities who would be by RAW wishing up all those crazy, sometimes custom or nearly so, Magic Items that players and villains alike are always in the market for. PCs and important NPCs provide the cash, the Mercanes provide the contacts, the extraplanar wish granters provide the magical might to make it all happen.

Some form or another of lawful evil would be a great source of extraplanar banking too. Just they're going to be a lot more particular about their customer base than the Neutral (IIRC) Mercanes.