Crises, World Wars and the Bank for International Settlements (1930–1945) — conclusion

Conclusion of the chapter

The Bank for International Settlements was founded in 1930 under the Hague Agreements to handle the reparations of the Young Plan. It opened its offices in Basel on 17 May 1930, in a former hotel opposite the railway station. Basel was chosen for its neutrality, its location between France and Germany and its distance from political and financial capitals. Switzerland granted the bank a charter that gave it legal personality and immunity, including in time of war. The bank's original purpose disappeared with the end of reparations in 1932, after which it became a bank for central banks and a forum for their cooperation.

The Czech gold affair of 1939, the gold operations with the Reichsbank during the war and the acceptance of looted gold damaged the reputation of the BIS. In 1944 the Bretton Woods conference recommended its liquidation. It survived, because the European central banks needed it. Switzerland's purchases of German gold, its refugee policy and the treatment of the dormant accounts of Holocaust victims became the subject of a reckoning in the 1990s, which led to the Bergier and Volcker reports and to the global settlement of 1998.

Conclusion of Part D

Part D has followed Basel from the partition of the canton in 1833 to the end of the Second World War in 1945. In this century, Basel became an industrial and financial city. The railways made it the northern gateway of Switzerland and the principal customs station of the country. The chemical industry, which grew out of the silk dyeing tradition, produced dyes from 1859 and pharmaceuticals from the turn of the century. Ciba, Geigy, Sandoz and Roche became international companies that dominated the economy of the city and shaped its financial centre. The private bankers of Basel transformed their consortium into the Basler Bankverein, which became the Swiss Bank Corporation, one of the three largest banks of Switzerland. The Basler Handelsbank financed industry and foreign trade, suffered from the German crisis of 1931 and was taken over in 1945. The cantonal banks served the broader population. Insurers founded after the fire of Glarus in 1861 made Basel an insurance centre.

The crises of the twentieth century tested the financial centre. The standstill agreements of 1931 froze the German assets of the Basel banks. The Paris affair of 1932 contributed to the criminal protection of banking secrecy in the Banking Act of 1934. The Bank for International Settlements, founded in 1930, made Basel the meeting place of the world's central bankers, but its conduct during the war, like that of the Swiss National Bank and the Swiss banks and insurers, raised questions that were answered only half a century later. Part E turns to the Basel financial centre today: its banks, its regulation, the fight against money laundering, the end of banking secrecy for foreign tax purposes and the practice of wealth planning.

In five sentences

1.The partition of the canton in 1833 created two half-cantons that still exist, while the railways, beginning with the first station on Swiss soil in the 1840s, made Basel the northern gateway of Switzerland and its principal customs station.

2.The chemical industry grew out of the silk dyeing tradition and the absence of Swiss patent protection, as Ciba, Geigy, Sandoz and Roche moved from dyes to pharmaceuticals and became international companies that dominated the city's economy.

3.The consortium of Basel private bankers became the Basler Bankverein in 1872 and the Swiss Bank Corporation in 1897, while the Paris affair of the Basler Handelsbank in 1932 contributed to the criminal protection of banking secrecy in the Banking Act of 1934.

4.Insurers founded in Basel after the great fire of Glarus of 1861, together with the federal supervision of insurance introduced in 1885, made the city an insurance centre whose group, Baloise, merged with Helvetia in 2025.

5.The Bank for International Settlements, founded in Basel in 1930 to handle German reparations, survived the end of reparations, the Czech gold affair and the Bretton Woods recommendation of its liquidation, while the conduct of the Swiss financial centre during the war led to the reckoning of the 1990s.

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.