The Bank of Coltar

The Bank of Coltar, officially the Coltar Central Bank (CCB), not to be confused with its succesor the Consolidated Merchant and Public Central Bank of Coltar (Merchant and Public), was the central bank of the City of Coltar from 892BGE until 350BGE.

It was formed by the Mayor of Coltar in ??? to deal with the minting and distribution of money, as well as providing financial services to Coltar's government. Coltar Central Bank continued to have close ties with Coltar's government until Coltar's incorporation into the Commonwealth of Pem in 357BGE.

Following the collapse of the Coltar banking system, Coltar Central Bank took over the running of five previously private banks in order to restore them to health. It eventually merged with two of these (and incorporated a third). Of the remaining two, one collapsed and the other, Merchant and Millners returned to private governance. Upon this merger, the bank renamed to the Consolidated Merchant and Public Central Bank of Coltar.

## History

### Early Role

The Coltar Central Bank was established circa 892BGE by Mayor Marigold Coltar. It's initial purpose was the collection of taxes and storing of money for Coltar's nobility and government.

### The Northern War

During the Northern War around 850-750BGE, Coltar was considered a safer location for individuals to store their wealth due to its defensible location and distance from Paramacca. During this period the Coltar Central Bank begun to acquire a reputation as a major banking institution.

### Post-Northern War Growth

Following the conclusion of the Northern War, the destruction of major banking centres of Ruby City and Alasorra... numerous local and national banks begun to appear across Pem and the Centrelands. However, the CCB used its prestige, reputation and capacity to maintain a strong foothold across the Centrelands. In 715BGE, in order to combat the threat of external banks and to bolster its position as a major bank, the CCB became the first major bank in the Centrelands to offer interest rates to clients. Although initial rates were extremely low, the CCB used the rates to justify and legitimise the groundbreaking practice of loaning client's money to businesses within Coltar, who would then repay the loan with interest, at a profit to the CCB.

### Rise of Private Banking

Around 705BGE, following the success of the CCB's interest scheme, private enterprises begun to establish themselves as middle men in the process, scouting out potential clients to loan money to inside and outside of Coltar. This process became commonplace and was legitimised following the investiture of these enterprises as registered private banks with the Coltar Banking Registration Act 702BGE.

As these private banks became increasingly commonplace, the CCB scaled back its own investment schemes in favour of becoming solely focused on the acquisiton of clients and loaning of money to private banks. In 689BGE the CCB became the first bank to offer promissory notes, initially only to be used internally within the Coltar banking system. Following the popularity of the internal promissory note system, Coltar's private banks begun to produce and distribute Issues of Guarantee, a promise of monetary payments rather than the physical transfer of monetary goods. Though the use of these Issues was limited, as they were only useful for (large) financial transactions between companies and other companies/banks, they allowed for flexible and convenient lending and investment. The reputation of the Coltar banking system gave these Issues enough financial clout to be widely accepted across the centrelands.

### Coltar Banking System Collapse

In 360, demand for Raqqosian spices lead the various merchant banks of Coltar to invest heavily in (and establish) companies that would be able to import, store and distribute spices across the Known World. The CCB issued loans to the merchant banks at an unprecented level. Furthermore, even the public banks of Coltar invested heavily in these ventures, with the savings of the individuals of Coltar used to fund investment. Numerous private individuals also arranged for investments to be made in their name through the investment, public and merchant banks, sinking huge amounts of their own financial capital into the ventures. These spice-related ventures were seen as an easy and lucrative investment, particularly as Coltar was unparalleled in financial capital.

The Great Spice Crash in 359, triggered by a lack of supply to meet demand, caused the collapse of numerous propsective spice trading companies, as they had no goods to trade. Coltar had not invested heavily in any local infrastructure projects regarding the spice trade and investment had largely consisted of foreign direct investment in companies that now had no spice to import or supply. These invesments were now worth a fraction of their predicted value and investors faced huge losses. Coltar's banks (alongside private individuals in Coltar) had invested over forty percent of the city's wealth in spice trade related ventures and now faced total collapse. Numerous banks called in merchant and investment loans, causing further economic fallout in businesses unrelated to the spice trade. Many intermediary banks were unable to recover their capital from spice investments or from their other debtors and either collapsed or were forced to close. A number became "shell-banks" which existed solely to recoup remaining assets. These shell-banks were gradually incorporated into the central bank as the original creditor for the loans.

he collapse of the banking system in Coltar resulting from the Spice Crash caused the collapse of Coltar's economy, that had been so heavily reliant on the banking sector, and was the primary reason Coltar joined the Commonwealth of Pem in 357BGE.

### Recovery

In 358BGE the CCB took over a diverse mix of 5 large banks that survived the initial economic fallout, but which were still susceptible to collapse. The CCB continued to run them independently to itself in order to manage and recoup investments as far as possible and to continue to provide a comprehensive, albeit hugely diminished, banking service to those who had previously been served by the numerous collapsed banks.

The banks taken over by the CCB were Coltar Merchant Bank, Merchants and Millners, Coltar Public Collective Bank, Coltar Independence Bank and Eastern Rock Investment Bank of Coltar.

Originally, the merchant banks were considered at the highest risk of collapse and as a result it was deemed sensible for the CCB to take over two banks from this sector (if one collapsed the other would be able to continue the provision of services and maintain half the clientbase). However, prudent financial management saved both the CMB and Millners from the threat of collapse in the immediate aftermath of the crash.

On the flipside, despite the assistance of the CCB and Coltar banking and financial sectors, Eastern Rock collapsed in 352 when its continued investment in existing assets failed to reach their expected returns. Merchants of Millners took over the entirety of the investment side of the CCB's banking portfolio, with much of Millners' merchant banking operations being transferred to Coltar Merchant Bank. The collapse of Eastern Rock is generally seen as the final low point for the Coltar banking sector, followed by the start of it's long road to recovery.

### Mergers and Restructuring

Millners went private. CCB did not want to fully merge with an FDI/Investment bank due to the bad history Coltar has with this type of bank.

CMB and CPCB merged with the CCB, renamed the Consolidated Merchant and Public Central Bank of Coltar (MPCBC). CIB incorporated.