A suffocating tension filled the strategic office. In a silence so deep you could hear a fly's wings buzz, I stared at Felix.
"So, what exactly happened?"
"If you review the documents we've prepared here..."
Felix cleared his throat and gestured to the stack of papers on the table.
They were crammed with endless rows of numbers, but I just skimmed the core details.
"Are you telling me the number of merchants trying to bid for ad space is increasing?"
Wasn't that our exact goal in the first place?
To dangle the new bait called 'advertising' so merchants would pour money into the festival.
"But there is too much money. That is precisely the problem," Babu, who was sitting at the center of the table, spoke up.
"If we combine the bids from the massive merchant guilds down to the small-time peddlers and blacksmiths, the total reaches tens of millions of sesterces at the very least."
"That is definitely an absurd amount."
I scrutinized the figures on the documents again. Something was definitely wrong.
No matter how tantalizing the bait of advertising was, the merchant class of Rome simply didn't possess this much cash at the moment.
There was only one logical explanation for this.
"Is it because of the banks?"
"Yes," Felix nodded.
"Ever since Crassus announced he was donating the bulk of his wealth to establish a relief foundation, numerous nobles and equites rushed to create similar foundations of their own. They've been lending money out to citizens and merchants at incredibly low interest rates."
"And now the merchants are trying to pour those borrowed funds into my advertising campaign."
Now it all made sense. Crassus recently built up his political reputation by offering loans to the common plebeians.
Until now, no one in Rome had ever attempted to run a large-scale lending operation for the masses. The patricians usually only lent money to close associates or other politicians, leaving the average citizen at the mercy of loan sharks.
"This could definitely turn into a massive problem. If they had strictly stuck to just lending, it might have been fine..."
I looked around at the grim faces of my staff. These men were the brightest financial minds in Rome right now.
Still, for them to catch on this quickly was impressive.
"They also took on depository banking, holding onto the money of the citizens and merchants," I noted.
"And now, those same merchants have suddenly started withdrawing their deposits en masse," Felix finished.
As a heavy silence blanketed the room, Vitruvius cautiously raised his hand.
"Excuse me, but could someone explain why exactly this is a problem?"
All eyes turned to the architect.
"Isn't depository banking just holding onto a client's money and giving it back when asked? I don't see what could possibly go wrong."
"If it were really that simple, there wouldn't be an issue," I replied with a dry chuckle.
It seemed that even Vitruvius, the greatest engineer in Rome, wasn't familiar with the concept of a bank.
Actually, banks existed in Greece and Rome even before my birth.
The only difference here was the magnitude.
The old banks lent only to a few closed circles, not to the masses.
"These foundations—no, these banks—have been creating money out of thin air."
Vitruvius's eyes nearly bugged out of his head.
"Creating money out of thin air? How is that possible?"
***
Credit creation.
The term itself might sound complicated, but the mechanism was actually quite simple.
"Banks take in people's money and pay them interest in return. But if all they do is sit on that cash, how exactly do they make a profit?"
"But I thought these foundations were operated by politicians purely for the benefit of the citizens?"
At Vitruvius's question, I just shrugged.
Well, the superficial rhetoric spouted by politicians is always designed to sound noble. Though, considering I was playing the exact same game, I suppose I was quite the hypocrite myself.
"But who in their right mind would keep draining their own wealth with no return on investment? At the end of the day, this is a business designed to buy influence and generate profit," I explained.
Now came the fun part of the banking industry.
"There's no need for the bank to keep all their depositors' money sitting in the vault. What if they skim a little off the top and invest it elsewhere? Or lend it out to other people?"
"We do something similar with our insurance premiums, actually," Babu chimed in with a nod.
"Though you've always insisted we manage the funds conservatively, sir... seeing this now, it was an incredibly wise decision."
Vitruvius stroked his chin, lost in thought, before asking, "Then what happens when the clients come back to withdraw their money? The bank won't have the money to give back."
"As long as the clients don't all show up at the exact same time, it's usually fine. Very rarely do people withdraw their entire savings at once."
That was how money was spun out of thin air.
The bank only keeps a fraction of the deposits in reserve and loans the rest out.
But the person who receives that loan deposits it right back and the bank then keeps a fraction of that deposit and loans the rest out again.
A deposit becomes a loan, which becomes a deposit again, and the cycle repeats. Through this fractional reserve process, money that physically doesn't exist multiplies exponentially.
"But because of the recent scramble over festival advertising, countless merchants are simultaneously trying to withdraw their deposits to secure ad space," I said.
I didn't expect my marketing stunt to trigger this.
If the banks couldn't honor those withdrawals, what would happen next? I didn't need to rack my brain to figure that out.
A bank run was imminent.
It wasn't my fault these banks had been run so negligently.
But if it weren't me, none of this would have happened.
"So that's how the merchants were able to bid such ridiculous sums for the ads."
"Yes, exactly," Felix nodded.
I was seriously impressed they caught the warning signs this quickly. If it weren't for Felix, I wouldn't have known a thing until the entire system imploded.
"Let's suspend the ad bidding process for now then. If we keep fueling the competition, the situation is only going to get worse."
"Understood." Felix let out a sigh of relief.
"Thank the gods you chose not to get into banking, young master. If we had jumped in when all those new banks were springing up everywhere..."
"It wouldn't have ended well. Though we would have managed our reserves far more securely than these morons."
Running an insurance enterprise was hard enough; full-scale banking was a terrifyingly volatile beast.
Unless you had near-bottomless reserves like Crassus's, it was too risky for me to tackle just yet.
"However, this crisis could be an opportunity for us."
"An opportunity?"
"If these banks default on their deposits, they'll have no choice but to beg for outside rescue. A drowning man doesn't haggle over the price of a rope."
"To survive the day, they'll surrender anything. They'll hand over shares in their businesses and control over them for a few coins," Felix realized.
"That's right."
I stared down at the documents in front of me.
Ideally, a full-scale bank run wouldn't happen. If credit dried up completely, the entire Roman economy could plunge into a severe depression.
But before it reached that apocalyptic point, I could step in as the savior. I could selectively buy up and bail out the fundamentally solid businesses.
That ship had already sailed anyway. Without access to their internal ledgers, I had no way to stop the initial crash.
To prepare for the fallout...
"Liquidate and pool every single sesterce we have currently available," I ordered, sweeping my gaze across the men in the room.
"The success of the Floralia festival and my father's consular election are both riding on how we handle this."
***
"Has life ever been this convenient? Depositing money has never been easier, and borrowing it is even easier."
"Exactly. I hear the roads are safe nowadays. Why don't we try opening new trade routes?"
"I've heard demand for Palmolive in the allied cities is surging. Even factoring in the transport costs, it's bound to be a highly profitable venture."
Ever since Crassus began offering low-interest loans to the plebeians, countless elites had swarmed into the banking trade.
Senators, patricians, and equites established their own foundations, entrusting the daily management to highly educated slave accountants.
However, unlike Crassus, who was willing to lend to those those with poorer standing, most of these new banks exclusively financed established merchants and massive trading guilds.
"Lending to merchants is great; you barely have to worry about them running away."
"Exactly, and it's much easier to seize collateral if they do."
As the dormant gold sitting in vaults flooded into the market, the Roman economy experienced an unprecedented boom.
New workshops, enterprises, blacksmiths' forges, and shops sprouted up overnight, naturally causing a surge in employment.
This booming cycle was incredibly beneficial to the politicians who had launched the banks.
"The people who borrow money from us are practically our political clients now, aren't they?"
"Precisely. The more money we lend out, the more secure our support in the next elections."
"We take their money for safekeeping, loan it out to others, and generate both profits and political clients simultaneously. We should be bowing to Caesar and Crassus for showing us this goldmine."
"We can lend out fortunes without even touching our own money. It's practically magic."
One of those enthusiastic bankers was Metellus, a member of one of Rome's most prestigious families whose son and nephew had been humiliatingly crushed by Caesar in the recent Vigintisexviri elections.
Metellus had colluded with Hortensius to exile Lucius Caesar from Rome, only for Lucius to rack up monumental achievements in his campaign against the bandits and publicly thank them for the opportunity.
Ultimately, they had been forced into a corner where they had no choice but to endorse Lucius's policies and sing his praises.
Yet, Metellus remained deeply wary of Lucius's father, Gaius Caesar, winning the consulship for next year.
"To block Caesar from seizing the Republic, we need to push one of our own men for the consulship as a counterweight, don't we?"
"We have more than enough money to fund a campaign now. Bibulus seems like a solid candidate, doesn't he?"
However, just a few weeks before Caesar's imminent return, the unthinkable happened.
***
"Are you telling me merchants are swarming us to withdraw their funds?!"
"Yes, master! We are critically short on coins right now! If this continues, we won't have a single coin left to give out..."
"Why in Jupiter's name is this happening?! What about the other banks?"
"Many have already declared insolvency, sir!"
The Forum, where the bankers had set up their tables, was completely overrun by mobs of merchants and citizens desperate to withdraw their deposits.
At first, it started with simple delays.
"So if I request the withdrawal today, I get the money tomorrow?"
"Yes, sir. We're just experiencing a minor accounting problem today. If you return tomorrow, we will disburse your funds in full."
"Hmm. Fine, I'll be back."
However, as rumors rapidly spread that merchants were being denied their rightful withdrawals, more and more panicked people flooded into the Forum.
"Give me my money right now!"
"What do you mean my money isn't here?! You bunch of thieving rats!"
"Please, everyone, calm down! Your money is perfectly safe! The moment we collect on our outstanding loans, we will immediately return your—"
"Shut your mouths, you lying scammers! Give me my money back immediately!"
As the angry mobs surged forward, the terrified clerks abandoned their tables and fled the Forum.
When news hit the streets, an even larger wave of citizens sprinted toward the Forum.
"If we don't hurry, we'll lose everything too!"
"I told you we should have just kept the silver buried under the bed!"
The smaller banks collapsed first, and it wasn't long before the prestigious institutions run by patrician families like the Metelli faced the same reckoning.
"So... this is every last coin we can scrape together right now?"
"Yes, master. That's all of it."
At the chief accountant's grim confirmation, Metellus rubbed his aching temples and let out a sigh.
A large crowd of angry citizens and fellow politicians had already surrounded his house, demanding their money back.
"Where the hell is Metellus?!"
"Give us our money back right now!"
His slaves were barely holding the furious mob at bay, but one wrong move could spark a full-blown riot.
"Call in the loans, whatever it takes! Liquidate everything we own! Sell the lands, sell the assets! If we default on these deposits, our house is finished!"
"But, master..." the accountant said cautiously.
"Every other bank and enterprise is desperately liquidating their assets as well. The market is flooded. Assets are selling for mere fractions of their worth. Even if you sold this entire estate right now, it wouldn't be enough to cover the shortfall."
"Then what in the gods' names am I supposed to do?!"
"We have no choice but to beg for help. And right now, the only men in Rome with money on this scale..."
"Caesar and Crassus," Metellus finished bleakly.
The accountant nodded.
A heavy, suffocating silence filled the room as Metellus agonized over his options.
Crassus already operated his own massive bank. Even as the market burned around him, Crassus was effortlessly honoring every single withdrawal request, surviving the panic completely unscathed.
In fact, citizens were now flocking to him, desperate to deposit their money in the one institution that seemed invincible.
That left Metellus with only one real option.
"Prepare my litter. The moment the sun sets, I must go to the Subura."
***
I looked at the group of senators trembling with anxiety before me.
They had arrived at Caesar's modest home only after the sun had fully set and darkness had cloaked the city.
They likely couldn't risk showing their faces here during the day due to the angry mobs hunting them.
"First things first. Hand over your financial ledgers."
"Our ledgers? You mean the bank's records?"
"To accurately assess your financial viability, I need to see the ledgers containing the records of all your family and business assets, not just the bank's," I stated flatly.
This was escalating far faster than I had anticipated.
The bank run was unfolding far more rapidly—and on a much more catastrophic scale—than I had predicted.
If I didn't handle this perfectly, the entire Roman economy was in danger of seizing up.
At my demand, Metellus scowled defensively.
"You expect us to hand over all our ledgers? That would be no different from exposing every secret of our noble houses to you!"
"I am well aware of that. But you senators are here to ask for my help, aren't you?"
I shrugged.
Looks like they still haven't grasped the gravity of their situation.
Now was hardly the time to be guarding family secrets.
How this crisis was resolved would dictate not only the fate of the Roman Republic but also their very survival.
That was exactly why these proud patricians had swallowed their pride to come here.
"When purchasing livestock, it's only natural to thoroughly inspect the animal for any hidden diseases."
In this room, there was only one person who had the luxury of choice.
And that was me.
"If my terms are unacceptable, feel free to say so."
"..."
As the senators exchanged desperate, humiliated glances, a suffocating tension filled the air.
This was going to be a very long night.