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Wednesday, June 29, 2011

WWII history- Bank for International Settlements

The Bank for International Settlements (BIS) is an intergovernmental organization of central banks. It fosters international monetary and financial cooperation and serves basically as a bank for central banks.  It is not accountable to any national government and provides banking services, but Only to central banks, or to international organizations like itself.  It is based in Basel, Switzerland.

Its origins and history are interesting and quite disgraceful...

The BIS was formed in 1930, established between Montagu Norman the then-Governor of The Bank of England,  and Hjalmar Schacht, his German counterpart who later served as Adolf Hitler's finance minister. The Bank was originally intended to facilitate reparation payments imposed on Germany by the Treaty of Versailles after the First World War.

~ Montagu Norman, Governor- Bank of England

During the period 1933–45, the board of directors of the BIS included Emil Puhl and Walter Funk, a prominent Nazi official, who were both convicted at the Nuremberg trials after World War II.  In addition was Herman Schmitz the director of IG Farben and Baron von Schroeder, the owner of the J.H.Stein Bank, the bank that held the deposits of the Gestapo.  It is alledged that the BIS had helped the Germans loot assets from occupied countries during World War II.

As a result of these allegations, at the Bretton Woods Conference in July 1944, Norway proposed the "liquidation of the Bank for International Settlements at the earliest possible moment". This resulted in the BIS being the subject of a disagreement between the American and British delegations. The liquidation of the bank was supported by other European delegates, as well as the United States but opposed by John Maynard Keynes, head of the British delegation.

~ John Maynard Keynes

The dissolution of the BIS was eventually approved. however the liquidation of the bank was never undertaken.  The British delegation did not give up trying to prevent the bank's dissolution and still had not yet been accomplished when Roosevelt died in April 1945.  New president Harry S. Truman and the British agreed to suspended the dissolution and the decision to liquidate the BIS was officially reversed in 1948.

Currently, the BIS is composed of 60 member central banks or monetary authorities.

~  Makes one wish FDR had lived...

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