In a more constructive vein from my previous post, the banking crisis of 1345 is interesting as it is the first modern financial crisis, caused by over leveraged banks with too little reserve capital lending to poor credit risks.
The fact that Edward's loan default to a single bank caused a widespread crisis in whole sector is strikingly modern - the default triggered a loss in confidence in the bank, which in turn caused the banks creditors to demand their money back. With too little liquid capital to repay its creditors the bank collapses causing a loss of confidence across the sector which in turn cannot meet its obligations and collapses in turn.
When you combine this with trade monopolies and currency speculation you have the makings of a proper financial crisis. This was compounded in 1345 because the science of economics was several hundred years in the future and so people lacked the conceptual tools to understand what was happening and why it was happening. Indeed, the idea that a default by a relatively minor king could trigger a sector wide crash would have seemed nonsense in 1340.
The fact that Edward's loan default to a single bank caused a widespread crisis in whole sector is strikingly modern - the default triggered a loss in confidence in the bank, which in turn caused the banks creditors to demand their money back. With too little liquid capital to repay its creditors the bank collapses causing a loss of confidence across the sector which in turn cannot meet its obligations and collapses in turn.
When you combine this with trade monopolies and currency speculation you have the makings of a proper financial crisis. This was compounded in 1345 because the science of economics was several hundred years in the future and so people lacked the conceptual tools to understand what was happening and why it was happening. Indeed, the idea that a default by a relatively minor king could trigger a sector wide crash would have seemed nonsense in 1340.
