Institutionalizing Central Bank Cooperation

Piet Clement

doi:10.1017/9781009367578.006

4 - Institutionalizing Central Bank Cooperation

The Norman–Schacht Vision and Early Experience of the Bank for International Settlements, 1929–1933

from Part I - General

Published online by Cambridge University Press: 02 November 2023

Piet Clement

Edited by

Barry Eichengreen and

Andreas Kakridis

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Barry Eichengreen: Affiliation:
University of California, Berkeley
Andreas Kakridis: Affiliation:
Bank of Greece and Panteion University, Athens

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Summary

The creation of the Bank for International Settlements (BIS) in 1929 to deal with the settlement of First World War reparations payments was seen by central banks as an opportunity to put international cooperation on an institutional footing. Their initial vision of what the BIS might achieve in support of the gold exchange standard was ambitious. In the view of Montagu Norman and Hjalmar Schacht, the BIS needed to become a forum not merely for information exchange and for refining the techniques of managing the gold exchange standard, but a truly cooperative organisation capable of providing support to central banks in emergencies and for developing new financial arrangements. This chapter investigates the scope of the Norman-Schacht vision, as well as attempts to put this vision into practice (e.g. through the BIS study committee on medium-term credits, or through the BIS-coordinated interventions in the Austrian banking and financial crisis of May-June 1931). Based on research in the historical archives of the BIS, this chapter assesses whether the Norman-Schacht vision for the BIS failed because of differences in policies and goals among the central banks, or rather because of the disruptive effects of the Great Depression.

Keywords

Bank for International Settlements central bank cooperation Montagu Norman Hjalmar Schacht international monetary system

Type: Chapter
Information: The Spread of the Modern Central Bank and Global Cooperation
1919–1939
, pp. 80 - 102

DOI: https://doi.org/10.1017/9781009367578.006 [Opens in a new window]

Publisher: Cambridge University Press

Print publication year: 2023

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