| Ten times a year the world’s
central banking elite meets in Basel, Switzerland for a night
of fun, frolic, fellowship – and "secret conversations that
can shape the course of the global economy." They meet in the
Bank for International Settlements (BIS).
They are the governors of the
central banks of the Group of 10 – Britain, France, Germany,
Italy, Japan, Canada, the US, Belgium Sweden, and Holland –
plus Switzerland. From the US not only the Chairman of the
Federal Reserve attends, but also the president of the New
York Federal Reserve Bank – recalling one early congressman’s
description of the Federal Reserve system as "one central bank
and eleven empty mausoleums" scattered around the
country.
The BIS was established in 1930
to transmit reparations payments from the losers of World War
I to the winners. It has become the central banker’s bank.
Fascinating tidbit: central banks own 84% of BIS shares and
the other 16% is in private hands. Second tidbit: the BIS
keeps its books in francs – gold francs.
The almost monthly dinner
parties in Basel help to explain how central bankers
co-ordinate policy between countries. It takes all the
surprise out of the "co-incidence" that the Bank of Australia,
Federal Reserve Bank, Bank of England, and Reserve Bank of New
Zealand all announce within a few days of each other that they
are printing up extra currency for Y2K.
Franklin
Sanders
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