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Lords of the Earth
Campaign Twenty-Eight

Banking Rules

There exist, in all nations blessed with Renaissance (Tech Level 8 or better) culture; banks, moneylenders, brokers and merchants who are willing to loan varying sums to their own rulers, and perchance, to the rulers of neighboring realms with which their own princes are of good accord. Obviously, such merchants must make a little something for their troubles and risks. Thus the borrower must pay a hefty interest surcharge as well as the amount initially borrowed.

Depending on the decision of the player for each civilized nation, other nations may also borrow from his banks, paying a greater fee. Of course, if a borrower defaults on a loan and is unable or unwilling to pay it back, the bank suffers. When a bank is forced into collapse by defaulting borrowers the economy of the nation suffers. This is reflected as a reduction in the Tax Rate of the country whose bank has suffered collapse, for one or more turns. More than one loan may be taken out against the national bank simultaneously as long as the total value of all currently outstanding loans does not exceed the amount of funds on hand for the bank to lend. The profits from these loans are reinvested in the bank, improving its value and ability to lend.

Each national banking system has one of three states; Open, Closed or Defaulted. An Open bank can make loans to its own national government and other nations with which its nation is currently trading. A Closed bank can only make loans to its own national government. A Defaulted bank cannot make any loans to any nation until it recovers from the default.

Each player may decide whether his nation's bank will be Open or Closed by using the Intervene in Banking Affairs (IBA) action. Additionally, a player may use the IBA action to declare that his bank is closed to specific other nations, even ones that he is trading with. Finally, Nations that are not trading with his nation at the beginning of the turn cannot take out loans from his bank.

Interest Rates will vary for the nation depending on if it is financing an Internal or External loan. Internal Interest Rates are fixed at the start, and will only be altered by Random Events, specific R&D projects, and successful repayments of Loans. External Interests rates may be guided by the nation using the IBA action though may never drop below the Internal Interest Rate, and may never go above double the Internal Rate.

Nations may never borrow from a country they are at war with.

New Action:
Name: Intervene in Banking Affairs
Code: IBA
BAC: 5 APs (King / Queen / Regent / Heir Only)
Stat: Auto
Results: This action may be used in three different ways. A separate action must be undertaken for each type if the player wishes to perform more than one during a given turn.

1) Open or Close the National Bank - Opens or Closes the National Bank to other Nations taking out loans.

2) International Restrictions - Adds or Removes another Nation from the 'Restricted' list of the Bank. Restricted Nations may not take out loans from a given bank, even if it is Open. A nation may only have three Nations on its restricted list at one time. (Note: If a Restricted Nation has Colonies, these Colonies also count as Restricted unless the Restricting Nation allows them special privilege). (Note: Certain R&D projects can raise the number of Nations allowed at a given time).

3) Lower or Raise External Interest Rate - Each Use will allow the player to alter the External Interest Rate by +/- 10%.