If you think the Bank for International Settlements is just a colorless intermediary, Adam LeBor’s new book will disabuse you of that notion.

“Tower of Basel: The Shadowy History of the Secret Bank That Runs th...” is a full-blown attack on the institution, which is based in Switzerland but answers, in the author’s view, to practically no one.

 

"Tower of Basel: The Shadowy History of the Secret Bank that Runs the World," by Adam LeBor. Source: Public Affairs via Bloomberg

LeBor details the appalling role of the BIS in funding the predations of Nazi Germany, a well-known blot on its record. Then he indicts the bank for its part in the rise of technocratic postwar Europe, in particular as midwife to the disastrous euro. LeBor wants the place shut down, or at least opened up.

He makes a decent case, but only decent. Founded in 1930 by two legendary central bankers -- Britain’s Montagu Norman and Germany’s Hjalmar Schacht -- the BIS was supposed to administer World War I reparations from Germany. But as Keynes and others had argued, the imposition of such crushing reparations was a terrible idea, and not long after the bank was established Germany wriggled out of them.

Yet the BIS lived on, sustained by a founding agreement that gives it an extraordinary degree of autonomy, a safe haven in Switzerland and a revenue stream from transaction fees.