“Tower of Basel: The Shadowy History of the Secret Bank that Runs the World” by Adam LeBor provides an in-depth examination of the Bank for International Settlements (BIS), often referred to as the world’s most secretive financial institution. Established in 1930, the BIS is located in Basel, Switzerland, and has played a crucial yet controversial role in global finance. LeBor delves into its complex and often hidden history, detailing its operations, influence, and involvement in some of the most significant political and economic events of the 20th and 21st centuries.
Key Themes and Details:
- The Foundation and Purpose of the BIS:
- The BIS was initially created to manage German reparations following World War I. However, it soon became a meeting point for the world’s central bankers, including those from countries on opposite sides during major conflicts, such as World War II.
- The BIS operates with a high level of autonomy, exempt from many of the laws of the countries where it operates, providing it with a unique status and considerable influence.
- Role During World War II:
- One of the most controversial aspects of the BIS’s history is its role during World War II. Despite the war, the BIS maintained financial ties with Nazi Germany, raising questions about its neutrality and the ethical implications of its actions.
- LeBor argues that the BIS played a role in enabling the Nazi war machine by allowing the continuation of financial transactions, even with belligerent nations.
- Post-War Influence and Global Financial Power:
- After the war, the BIS continued to grow in power and influence, becoming a central player in the establishment of the modern global financial system.
- The BIS has been instrumental in shaping policies that affect international trade, monetary policy, and economic governance.
- Secrecy and Accountability:
- The BIS operates behind closed doors, making decisions that have far-reaching impacts without public scrutiny. LeBor highlights the secrecy surrounding its meetings, where central bankers discuss policies that affect entire economies.
- The lack of transparency and accountability raises concerns about the democratic deficit in the global financial system and the potential for unchecked power.
- Modern-Day Role:
- Today, the BIS serves as a hub for the world’s central banks, including the Federal Reserve, the European Central Bank, and the Bank of Japan, among others.
- It continues to shape global financial policies, particularly in the areas of banking regulation, monetary stability, and economic crises, such as the 2008 financial meltdown.
Character of the BIS:
LeBor paints the BIS as an institution shrouded in secrecy and power, with its actions rarely scrutinized by the public or elected officials. Its close relationships with central banks grant it extraordinary influence over the global economy, making it a key player in the financial world, yet one that operates in the shadows.
Conclusion:
Adam LeBor’s “Tower of Basel” provides a critical and detailed examination of the BIS, offering readers insight into the opaque and powerful world of international finance. It questions the ethics and accountability of an institution that wields immense power but remains largely unknown to the public. LeBor’s work suggests that the BIS plays a pivotal role in the shaping of global economic policies, often beyond the reach of democratic oversight.
