Technomancer: Genesis Chapter 80: Liquidity Crisis

There was an increasing demand for the service that Ezra had created, the bank was getting many customers, and after fifty merchants had been approved Ezra estimated that there was going to be a liquidity issue.

He was having a headache because of the 150 000 imperial gold that was given for his budget he already lent out 49500 the past month and out of that only eight per cent had been recovered as a monthly payment. As the CEO of the bank, he could not let the bank run out of money to loan, a bank must always look stable no matter what.

The success of the bank became a hindrance in itself because of the impending liquidity crisis. Normally a bank had other assets than loans receivable but in its infancy, this was the only asset they had and since they were not taking deposits yet there was no way of acquiring more money. Being the first bank they could not leverage their assets and get cash from other banks which was the modern practice on earth.

He was deciding whether to implement positive interest rates already since they were so short, but he doubted people would flock to them since the service was not fully established and if you were giving free money the merchants would be suspicious and would most likely stop doing business with them.

Reitz came by to Ezra on the third floor of the bank.

"How goes business my son?" asked Reitz.

"It's doing well Lord Father," answered Ezra with a worried tone.

"Haha, you make it sound like that is a bad thing."

"At the rate, lending is going we are going out of money to lend," Ezra said while looking at the reports his staff gave him.

"That is indeed a problem, do you know how to solve it then?" Reitz asked as he clapped Ezra's shoulder.

"Uhm, is it okay if we use more of the treasury?" Ezra looked at his father with a hopeful tone.

"No." Reitz said flatly, he put his foot down, as long as there were no returns yet he had told Ezra before that he would not let him use more than what he allotted." You're smart Ezra, you'll find a way."

"Father, do you think the Rex would lend us money?" Ezra asked again.

"No, and I will not ask on your behalf, the act of asking money from your lord is unheard of and even not paying your dues on time is already a shame."

Ezra sighed, 'At least I tried.'

"Can't you just stop lending altogether Ezra?" asked Reitz.

"Father, if we stop it altogether, we would seem unstable and they might stop using the bank. If we keep on rejecting the merchants who have a sound business plan, we also might lose them as possible clients in the future."

"Hm, okay then, I need to go. I have some duties I need to get to when I get back to the castle." Reitz said and then he looked thoughtfully."Oh, and your battle training doesn't stop it just because you are focused with this, understand? You already skipped two of them, and as a Lord, you should be ready to take up the mantle. I know you cannot use spells yet but still, you shouldn't slack off."

"Yes lord Father, I am sorry. I will make it up tomorrow." Ezra nodded.

"Are you coming back with me?"

"No father, I still need to think about what I should do next."

"Very well, I shall leave you to your task."

"Farewell Lord Father,"

"Farewell"

Ezra looked at the stack of papers. Some of the clerks still made mistakes and Ezra had to teach them the proper way. However, he found that he could delegate some of this to Extos. He glanced at each report and looked at the reasons for loaning.

Jewellery, glassware, arms, luxuries commodities, there were many various items that merchants wanted to use the loans for, he was trying to look for patterns, anything that would help him to decipher the solution for the impending liquidity crisis.

He was already doing this for two days straight, he looked at the people he already approved and for the others pending for approval. He leaned back in his chair and looked at the roof, he wanted to take a break from the mayhem.

He closed his eyes and rubbed his temples.

"What is the problem, Lord Ezra," asked Hearth, he had grown muscular and his features resembled more and more of his father Aaron, the past five years he became humbler. He had feared and respected the kid he answered to.

He learned a lot of things from Ezra. When he was not in his workshop he taught his guards. Hearth, Caspian, Rycharde and Evered had learned a lot, from arithmetic to algebra. A lot of times Ezra gave them problems to answer. When they did this they found that the concepts they learned was much easier.

A lot of times they heard him jabber about things they did not understand though, like neuroplasticity and the cognition involved in learning but even though this happened he did not treat them as a lord, he even called them his friends in private.

Hearth and Caspian often talked how their Lord knew so much, they had gotten pretty close since the duel. A year after, Hearth actually apologized to Caspian but they both just laughed it off.

They found that each of them had their own strengths, Caspian was quick while he was tough, even in the things that Ezra taught it seemed that they excelled at things, he was good at geometry while Caspian was good at linear algebra.

Ezra taught them practical ways of using the knowledge of mathematics and they were very interested in applying what they learn. This was the first time Hearth saw Ezra in a pinch and he was concerned, for him, it seemed that Ezra could solve any problem.

Both he and Caspian once told him this but he looked distraught. Ezra told them that it was not true, he could not bring back someone from the dead and after that he was silent. They never mentioned it to him again. They knew that Ezra was really affected by Sir Evan's death.

"Yes, milord, what ails you?" seconded Caspian.

"Well, it's just we are going to run out of money to lend, and sooner or later we will have to stop lending, unless more money comes in, we can't lend to other merchants and I fear that when we stop, our reputation will be besmirched, this business is heavily reliant on honesty and stability. If we stop providing then we might as well stop altogether. I was just looking for ideas."

"Oh," answered Caspian.

"There are no patterns in what they are trying to acquire, it ranges from luxuries to necessities," Ezra said rubbing his chin.

"Why are you looking for those, milord?" asked Hearth.

"Well I was just looking the most in-demand good and just prioritize those merchant who traded the good, during the time we have less money we make it seem that we favor those merchants for that time and then I'll just give a memo on that so that they would think that we are focusing efforts on the good while we make the others wait until we have more money to lend."

"Oh," Hearth looked thoughtful. "Milord, aren't these merchants buying these goods here?"

Ezra was astonished he forgot to factor out location. This was what he missed he looked for patterns in what they bought yet forgot that they actually used the money to purchase the goods inside Bren. With the added flood of money, people should be spending and the money should be going back to the bank but since he did not implement deposits, none of that was going back.

Hearth's comment was gold, he already thought of a way to utilize that money without implementing the deposits.

"Thanks, Hearth" Ezra smiled.

"What? I don't exactly know what I did." Hearth said bewildered.

"Never mind that," Ezra told Hearth then he faced Caspian, "Caspian, we are going back to Castle Blackfyre, I think I found a way to get more money."

"How milord?"

"We are going to make a bank note."

Chapter end