This would probably work very well If money was not global so you have to choose where to store your money and eg a "man of the hour" could not instantly buy a huge contingent of mercenaries just because his king has a total of 50000 mnai in his coffers. In RTW(and most other games of the genre) FMs walk around with credit cards to access a international bank account, not to forget the cash machines that can be found almost everywhere...
back then(And even today) it was already a big challenge to get money to where yopu need it.

if games would have this(not very convenient) feature you would probably be able to decide how much money is kept in a certain city or with a general so you could decide how much money the enemy gets when he gets hands on the "warchest".

Well lets not dream of games where training soldiers takes 20 years and so on..

I personally role play that the "looted" money is the hold of the Warchest/public treasury and that depending on how much freedom i give my soldiers I have to compensate them from the war chest thus how much I can keep for mys.. the empire. this takeing into account that "I" don't get any of the loot directly only if I destroy buildings.

imagine the situation:
FM: well lads good job, but we'Ve got orders to do the citizens no harm and ...
army: BOOOOOO!!!!
FM: ... not set any buildings at fire...
army: Aww, that sucks, no fun!
FM:... and not to loot the City, ...
army: Marcus Appius Stinks! ... He has no balls!... this is a waste of time
FM: BUT Look what I've found and gonna share with all of you*holds up war chest*
Army: Hail Marcus Appius!!!!

ps if someone has the nick marcus appius I would like to apologize I just chose some random roman name.

Still I'm a bit sad that I don't get money from killing FMs commanding large (expensive) armies as they would probably at least have the pay for one season with them in gold mnai.
and governments could give a bit more cash as a 99% destroyed gov building barely feeds the men through the winter. :( but afaik that's a hard coded percentage of the build cost eh?