Tower of Basel

Published by Public Affairs on 13th June 2013

The inside story of the central bankers’ secret bank is an 80 year history of an institution that was designed to escape public scrutiny and to emphasize discretion, even as it became a leading architect of the global financial system.

It’s the engine at the heart of the financialization of everything. Six times a year, the world’s most powerful and exclusive club meets in an unexceptional office building in Basel, Switzerland. They are central bankers, the presidents of national banks, such as the US Federal Reserve, the Bundesbank of Germany and the Bank of England. They have come to Basel to attend the Global Economy Meetings at the Bank for International Settlements. The discussions at the BIS meeting, the information that is shared there, the deals that are brokered and the subsequent decisions that the bankers take, shape all of our lives. The main job of a central banker is coordinate interest rates, regulate credit and the money supply and, especially in these austerity-obsessed times, work to prevent inflation. In short: these men control fiscal policy in the developed world. That means that the men gathered at the BIS influence how much money we have in our pockets and bank accounts, how much that money is worth and how safe it will be. Central bankers now “seem more powerful than politicians,” wrote the Economist, “holding the destiny of the global economy in their hands”. The Economist understated the case. Thanks in part to the global financial crisis, the attendees at the BIS bi-monthly meetings have seen their power reach unprecedented levels. Central bankers now shape the destiny, not just of their national economies and of the global economy, but of nations themselves.