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International Bank for Reconstruction and Development

Published online by Cambridge University Press:  22 May 2009

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Extract

On May 25,1948, the International Bank for Reconstruction and Development announced that arrangements had been completed for the sale of an issue of 2½ per cent Swiss franc serial bonds, maturing in 1953 and 1954, with a total value of 17 million Swiss francs (approximately $4,000,000). The entire issue was purchased by the Bank for International Settlements, the proceeds to be made available to the Netherlands Government for the purposes of the loan granted it in August 1947. According to the Bank's announcement of the issue, the original loan agreement with the Netherlands would be adjusted to provide for repayment in Swiss francs in the amounts and on the dates corresponding to the maturities of the issue; the principal purpose of the sale was “to make currencies other than dollars available to the Bank for use in its lending operations.” As the first sale of Bank securities outside the United States, the Swiss franc issue was considered by Bank officials as a pilot issue foreshadowing future sales in order to replenish the Bank's reserves of foreign currencies.

Type
International Organizations: Summary of Activities II. Specialized Agencies
Information
International Organization , Volume 2 , Issue 3 , September 1948 , pp. 526 - 528
Copyright
Copyright © The IO Foundation 1948

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References

1 International Bank for Reconstruction and Development Press Release 100, May 25, 1948, The Neue Zuricher Zeitung, unofficial organ of the Swiss National Bank, stated regarding the Swiss franc issue: “The form of the announcement… was apt to cause misunderstanding. The impression given was that the operation was merely a credit… within the scope of a larger operation by the International Bank to the Netherlands Government, which thereby obtains needful [sic] Swiss francs. This credit… however makes no demand on the Swiss capital market and therefore in no way affects our internal market.” The press reported that the Zeitung statement was interpreted to mean that the Bank for International Settlements had actually put dollars–not francs–at the disposal of the International Bank in order that the Netherlands Government migh t obtain dollars earlier than would be possible under the terms of the original loan agreement of August 1947 (New York Times, May 31, 1948).

2 International Bank Press Release 91, April 13, 1948.

3 See International Organization, II, p. 356.

4 International Bank Press Release 96, May 18, 1948.

5 United Nations Bulletin, IV, p. 430Google Scholar.

6 International Bank Press Release 102, June 4, 1948.

7 Document E/803.

8 New York Times, June 29, 1948.

9 International Bank Press Release 109, August 4, 1948.

10 International Bank Press Release 108, July 26, 1948.