Searching, provocative history of the most secretive—and globally influential—of Swiss banks, “the most important bank in the world and predates both the IMF and the World Bank.”
Ben Bernanke is a governor, as is the head of the Bank of England, the head of the Bank of China and the heads of the central banks of Germany, Brazil and Spain. Altogether, 60-odd banks make up the membership of the Bank for International Settlement, headquartered in Basel, Switzerland—a town specifically chosen for its quiet and orderliness. Financial journalist LeBor (The Believers: How America Fell for Bernard Madoff's $65 Billion Investment Scam, 2010, etc.) traces the evolution of the bank from useful instrument of establishing international financial stability in post–World War I Europe to an amoral institution that is closely implicated in both the establishment of the euro zone and its fraying at the zone’s edges in places like Greece, Cyprus and Spain. In the time between, the BIS, by LeBor’s account, was politically evenhanded in all the wrong ways: Although putatively one of the “new multilateral institutions run by apolitical technocrats,” its directors in fact gave information to the Third Reich on Allied logistics (and vice versa), even as the bank served as a bulwark of capitalism in the Cold War—and even if the combatant nations were moving funds back and forth among themselves. Particularly in the latter sections dealing with the unification of the currency and the sink-or-swim social Darwinism of austerity, LeBor’s account has a bit of a conspiracy-theory feel to it, but one backed up by solid reporting and interviews with bank players, all that Swiss secrecy notwithstanding. The author closes with recommendations for how the bank could better serve the world instead of itself, including greater transparency and lifting the “legal inviolability” accorded to it by international treaty.
Wonkish at times, but a real eye-opener.