The commercial banks, the securities market and German camouflage

The big banks and the German business

The Zurich big banks entered the war weakened by a decade of losses on their German business. In the 1920s the Swiss banks had lent heavily to German industry, municipalities and banks. When the German banking crisis of 1931 led to exchange controls and standstill agreements, these credits were frozen and could be recovered only slowly and at a loss. The Commission’s study of the big banks, directed by Marc Perrenoud, traced the ways in which Swiss institutions tried to reduce their frozen German claims. The most important of these was the creation of the so-called Registermark, a blocked form of German currency that could be used for certain purposes inside Germany but could be converted into foreign exchange only at a heavy discount.¹

The losses of the 1930s reshaped the Swiss banking landscape, a process described in chapter F.I. Several banks needed rescue operations, among them the Schweizerische Volksbank, which received CHF 100 million from the Confederation. A number of other institutions were restructured or absorbed by larger competitors. At the end of the Second World War, according to the Commission, the Swiss banking landscape was dominated by a trio: the Schweizerische Kreditanstalt, the Schweizerischer Bankverein and the Schweizerische Bankgesellschaft, which had absorbed the Eidgenössische Bank.² The Kreditanstalt, the oldest of the three, was a Zurich bank. Bank Leu, the oldest of the Zurich banks and the subject of an earlier chapter of this book, had been heavily exposed to Germany. After a restructuring in 1937, it faced new difficulties during the war, above all in its foreign business.³

The same study documented attitudes that sit uneasily with the image of Swiss banking as a neutral service. It found that some leading bankers held strong reservations about working with Jewish financiers.⁴ It also showed that the German business, despite the losses, remained attractive to the banks throughout the war. The German subsidiaries and correspondents of the Swiss banks continued to operate, the banks financed trade under the clearing system while also managing the assets of German clients in Switzerland. None of this was illegal under Swiss law. The Commission’s point was that legality was not a sufficient standard in a situation in which the counterparty was a state conducting a war of conquest and a policy of extermination.

The commercial banks and the gold trade

In the first two years of the war the commercial banks were active buyers of German gold. The 1998 interim report found that about one eighth of the German gold shipments to Switzerland was destined for the commercial banks in 1940 and 1941. The statistical overview put the gold received by the Swiss commercial banks in these years at 61.2 million dollars, a figure considerably higher than the 20.3 million dollars that Allied investigators had calculated after the war.⁵ At the exchange rate of the time, the dollar figure corresponds to the CHF 267 million that the historical encyclopaedia attributes to the big banks.

The banks resold the gold at a profit, partly to the SNB, partly to private buyers in Switzerland and abroad. From the autumn of 1941 their room for manoeuvre narrowed. The SNB, concerned about the effect of the private gold trade on the franc and about the risks of an unregulated market, reached an understanding with the banks that concentrated the German business in its own hands. From 1942 onwards, regular transactions with the Reichsbank were the sole domain of the central bank.⁶ This arrangement had a consequence that became apparent only after the war. Because the SNB had taken over the German gold trade, the post-war claims were directed against the central bank and ultimately against the Confederation, while the commercial banks escaped the gold question almost entirely. When the dormant accounts and the treatment of Jewish clients came under scrutiny in the 1990s, they were far less prepared for it.

Looted securities and the restitution decree of 1945

A second field in which Swiss banks came into contact with looted assets was the securities trade. German authorities seized large quantities of shares and bonds in the occupied countries, above all in the Netherlands, Belgium and France, and sold part of them on neutral markets in exchange for foreign currency. Switzerland, with its stock exchanges in Zurich, Basel and Geneva and its many banks active in the international securities business, was an obvious outlet. The Commission’s study of Swiss securities transactions with the Third Reich found that trading was particularly heavy in 1937 and 1938 and again in 1940 and 1941, and that German securities had fallen below 20 per cent of their nominal value by 1939.⁷

Swiss civil law offered the owners of looted securities little protection during the war. Under the Civil Code, a good-faith purchaser of movable property acquires ownership, and bearer securities in particular circulate freely. The Federal Council issued no special civil law rules on the trade in stolen or confiscated securities during the war. Only on 10 December 1945 did it adopt the so-called Looted Assets Decree, the Raubgutbeschluss, which allowed the owners of assets taken in occupied territories to claim them back even from a good-faith acquirer, and which allowed such an acquirer in turn to claim the purchase price from a seller who had acted in bad faith.⁸

The results of the decree were modest. By the deadline in 1947, only 785 claims had been filed, with a total value in dispute of about CHF 2 million. The Netherlands alone submitted 760 of them. In 1951 Switzerland agreed to pay CHF 635,000 to settle claims valued at CHF 1.3 million, with the banks contributing CHF 200,000 without being publicly named as parties.⁹ The Commission concluded that more looted property had reached Switzerland than had been claimed, and that the Federal Supreme Court had interpreted the restitution decree very restrictively. For cultural property the picture was somewhat different. Kurt Siehr found that the works of art claimed before the Looted Assets Chamber of the Federal Supreme Court had all been returned, either by judgment or voluntarily, although the Civil Code allowed good-faith acquisition of stolen objects after five years.¹⁰

Camouflage, transfer and transit

The third field concerned the German assets that were brought to Switzerland or disguised as Swiss during the war. The Commission’s study of covert German operations described Switzerland as a hub for three kinds of activity: the camouflage of German business interests abroad through the apparent “Swissification” of firms, the transfer of assets to neutral countries as defeat approached, and the transit of Germans who wished to leave Europe. It estimated that the number of German front companies in Switzerland ran into several hundred and that total German assets in the country exceeded CHF 2 billion, although the officially recorded amounts were just over CHF 1 billion. About two thirds of these assets had arrived after the outbreak of war, despite German exchange controls.¹¹ The study also found that the Swiss authorities withheld important findings from the Allies and the public, preferring to present German holdings as mostly old and therefore unproblematic investments.

The best known of these structures had a Basel address and a long Zurich afterlife. The Internationale Gesellschaft für chemische Unternehmungen, known as IG Chemie and later as Interhandel, was founded in 1928 and 1929 with a capital of CHF 290 million, which made it by far the most heavily capitalised company in Switzerland. It held the American interests of the German chemical group IG Farben, in particular the General Aniline and Film Corporation. After the United States seized GAF in 1942, Interhandel fought for two decades to recover it. The shares were finally auctioned in 1965 for 122 million dollars, of which 40 per cent went to the owners of Interhandel and 60 per cent to the United States government. In 1967 Interhandel merged into the Schweizerische Bankgesellschaft, which thus acquired both the proceeds and, as later litigation showed, part of the historical burden.¹²

Ransom money and Zurich intermediaries

One of the Commission’s early reports shed light on a little-known use of Swiss financial channels. Between 1940 and 1944, German agencies in the occupied Netherlands extorted ransom payments from Jewish families in return for exit permits. The Commission documented about 400 such cases with a minimum volume of CHF 35 million, about half of which had a Swiss connection. The sums demanded typically ranged from CHF 50,000 to CHF 100,000 per case and had to be paid in francs.¹³ Among the intermediaries were Zurich lawyers such as Arthur Wiederkehr, who negotiated directly with German authorities, and Veit Wyler. Banks processed the payments while aware of their moral ambiguity. For the families concerned, the payments were often, as British and American officials themselves recognised, the only alternative to deportation, yet by November 1942 the Allies had placed Swiss intermediaries on their blacklists as a matter of economic warfare.

The ransom cases show the moral complexity of wartime finance with particular clarity. A payment that enriched the SS and supplied Germany with foreign exchange could also save a family from Auschwitz. The Swiss authorities knew of these transactions and took little action against the intermediaries, whose activity they described as the “smuggling of emigrants” although it was not a criminal offence. Because the episode cannot be judged by a single standard, the Commission did not attempt to do so.

Notes

1. Marc Perrenoud, Rodrigo López, Florian Adank, Jan Baumann, Alain Cortat and Suzanne Peters, La place financière et les banques suisses à l’époque du national-socialisme. Les relations des grandes banques avec l’Allemagne (1931–1946), UEK publications vol. 13, 2002, German summary, https://www.uek.ch/de/schlussbericht/Publikationen/Zusammenfassungenpdf/13d.pdf. ↩
2. UEK publications vol. 13 (Perrenoud et al.), German summary, https://www.uek.ch/de/schlussbericht/Publikationen/Zusammenfassungenpdf/13d.pdf. ↩
3. HLS, Jan-Henning Baumann, “Bank Leu”, https://hls-dhs-dss.ch/de/articles/041661/2022-11-03/. ↩
4. UEK publications vol. 13 (Perrenoud et al.), German summary, https://www.uek.ch/de/schlussbericht/Publikationen/Zusammenfassungenpdf/13d.pdf. ↩
5. UEK, statistical overview (December 1997), https://www.uek.ch/de/publikationen1997-2000/goldtransaktion.pdf; UEK, Switzerland and Gold Transactions in the Second World War. Interim Report (1998), https://www.swissbankclaims.com/Documents/Doc_6_golde.pdf. ↩
6. UEK, Switzerland and Gold Transactions in the Second World War. Interim Report (1998), https://www.swissbankclaims.com/Documents/Doc_6_golde.pdf. ↩
7. Hanspeter Lussy, Barbara Bonhage and Christian Horn, Schweizerische Wertpapiergeschäfte mit dem «Dritten Reich». Handel, Raub und Restitution, UEK publications vol. 14, summary, https://www.uek.ch/de/schlussbericht/Publikationen/Zusammenfassungenpdf/14d.pdf. ↩
8. UEK, Die Schweiz, der Nationalsozialismus und das Recht. II. Privatrecht, UEK publications vol. 19, 2001, summary, https://www.uek.ch/de/schlussbericht/Publikationen/Zusammenfassungenpdf/19d.pdf (contribution by Frank Vischer). Claims were heard by a special chamber of the Federal Supreme Court. ↩
9. UEK publications vol. 14 (Lussy, Bonhage, Horn), summary, https://www.uek.ch/de/schlussbericht/Publikationen/Zusammenfassungenpdf/14d.pdf. ↩
10. UEK publications vol. 19, summary, https://www.uek.ch/de/schlussbericht/Publikationen/Zusammenfassungenpdf/19d.pdf (contribution by Kurt Siehr). ↩
11. Christiane Uhlig, Petra Barthelmess, Mario König, Peter Pfaffenroth and Bettina Zeugin, Tarnung, Transfer, Transit. Die Schweiz als Drehscheibe verdeckter deutscher Operationen (1938–1952), UEK publications vol. 9, summary, https://www.uek.ch/de/schlussbericht/Publikationen/Zusammenfassungenpdf/09d.pdf. ↩
12. Mario König, Interhandel. Die schweizerische Holding der IG Farben und ihre Metamorphosen – eine Affäre um Eigentum und Interessen (1910–1999), UEK publications vol. 2, summary, https://www.uek.ch/de/schlussbericht/Publikationen/Zusammenfassungenpdf/02d.pdf. König concluded that IG Chemie was a holding company and should not be described as a front organisation. ↩
13. UEK, Die Schweiz und die deutschen Lösegelderpressungen in den besetzten Niederlanden, Bern 1999, https://www.uek.ch/de/publikationen1997-2000/loesegeld.pdf. The report was prepared under the direction of Thomas Sandkühler and Bettina Zeugin. ↩

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 September 2025.