Tag: central banks

BIS – Bank of International Seattlement, Marcus Wallenberg, Per Jacobsson & KreugerBIS – Bank of International Seattlement, Marcus Wallenberg, Per Jacobsson & Kreuger



Sveriges Riksbank, or simply the Riksbank, is the central bank of Sweden. It is the world’s oldest surviving central bank. Established17 September 1668; 355 years ago. Following its third centennial in 1968, the bank instituted the annual Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, which is awarded with the Nobel Prizes at the Prize Award Ceremony in Stockholm, on 10 December, the anniversary of Alfred Nobel‘s death.

Stefan Ingves former chief for the Swedish central bank writes a report in 2022.

https://www.riksbank.se/globalassets/media/rapporter/pov/artiklar/svenska/2022/220314/2022_1-sveriges-roll-i-det-internationella-ekonomiska-samarbetet—i-gar-i-dag-i-morgon.pdf

Page 9: “Sweden’s multilateral involvement thus began early and this is a contributing reason why it has been so successful, not least for the Riksbank. Through international lobbying and a lot of luck, for example, the Riksbank managed to become a partner in the world’s first multilateral financial institution, the Bank for International Settlements (BIS), right from its inception in 1930, and since 1931 the Riksbank has been represented on the board, see Rooth (1930) and Sweden’s Riksbank (1930). As we will see, the value of this can hardly be overestimated, either for the Riksbank or for Sweden.”

2nd annual report of the Bank for International Settlements – 1932

In 1933 the Bank for International Settlements appointed as an Arbitration Committee, Messrs. Marcus Wallenberg (Chairman), T. H. McKittrick, Jr., and Franz Urbig. When the Standstill Agreement expired under its terms on February 28, 1932, and was thereupon renewed for another year, the same Arbitration Committee was reappointed, with the addition, as alternates for the members, of Messrs. Carl Trygger, G. Tyser, and Robert Pferdemenges.

Marcus Wallenberg Sr.

In 1890, Wallenberg became ombudsman for Stockholms Enskilda Bank (SEB) and from 1892 belonged to the bank’s executive board. He became vice chairman of the board of SEB in 1920 and then served as its chairman from 1938 until his death in 1943.

In 1920 he became a member of the League of Nations‘ newly established Financial Committee, of which he was chairman from 1921 to 1922. In 1921, Wallenberg founded the Swedish Taxpayers’ Association. Wallenberg participated in leading positions in the implementation of the Dawes Plan, and was the sole permanent arbitrator in disputes concerning the interpretation and application of the law, the financial burden on German industry and was a member of the permanent arbitration tribunal for disputes concerning the Dawes Plan application.

https://www.bis.org/search/index.htm?globalset_q=Wallenberg

Marcus Wallenberg Sr, 5 March 1864- 22 July 1943

As the chairman of the arbitration committee of BIS Marcus Wallenburg Sr. asked Cassell to recommend a Swede to join the Secretariat of the League of Nations, former UN, he suggested Per Jacobsson. He was offered the post by Marcus Wallenberg Sr. and accepted it.

Ivar Kreuger and the Kreuger crash

(After leaving the League, Per Jacobsson returned to Sweden and worked from January 1929 to July 1930 at the Swedish Economic Defence Commission which was studying preparation for the eventuality of another war, and then from July 1930 to September 1931 as Economic Adviser to a Swedish industrial company, Kreuger and Toll.

Kreuger & Toll was a construction and holding company founded on May 18, 1908, by two Swedish engineers, Ivar Kreuger and Paul Toll, with Henrik Kreüger working as a consultant and chief engineer.

Ivar Kreuger’s suspicious death precipitated the Kreuger Crash which hit investors and companies worldwide, but particularly hard in the United States and Sweden. Ivar Kreuger shot himself in the head when he ”committed suicide” in his office in Paris on March 12, 1932.

Ivar Kreuger, 2 march 1880- 12 March 1932 (aged 52)

Following the Kreuger crash, both the debentures and shares became worthless, and several thousand Swedes and small banks lost their savings and investments as a result. Large investors and suppliers apart from share holders, received a total of 43% back.

The banks related to the Wallenberg family company group, Stenbeck company group, and Handelsbanken took over most of the companies in the Kreuger empire. Swedish Match recovered shortly after the crash as did most of the industrial companies within the Kreuger empire. Swedish Match received a large government guaranteed loan that was fully repaid after several years. IMCO in US however did not survive. The liquidation took nine years and was eventually finished in 1941.

Per Jacobsson and BIS

From early on, the BIS developed its own research in central banking and finance under the dynamic guidance of its first Economic Adviser, the Swede Per Jacobsson (1894-1963), and started collecting financial and banking statistics. The BIS research found its way into the Bank’s Annual Report, which soon established itself as a leading publication in its field.

Per Jacobsson was employed at the Bank of International Settlements from 1931 to 1956.

https://www.bis.org/about/history_1foundation.htm

Per Jacobsson was employed at the Bank of International Settlements from 1931 to 1956.

In December 1956, he was appointed as the managing director of the International Monetary Fund (IMF), a position he held until his death on 5 May 1963.

https://www.bis.org/about/history_1foundation.htm

The Great Depression

As a consequence of the Great Depression of the 1930s, the reparations issue quickly faded. The German financial and banking crisis of the summer of 1931 led first to a one-year moratorium on reparation payments (Hoover Moratorium of July 1931) and subsequently to their complete cancellation (Lausanne Agreement of July 1932).

With the reparations issue out of the way, the BIS focused its activities on the technical cooperation between central banks (including reserve management, foreign exchange transactions, international postal payments, gold deposit and swap facilities) and on providing a forum for regular meetings of central bank Governors and officials.

Of these meetings, the regular Board meeting weekends, which brought together the Governors of the main member central banks, were the most important (in the 1930s, the BIS Board consisted of the Governors and their alternates of the National Bank of Belgium, the Bank of France, the German Reichsbank, the Bank of Italy, the Netherlands Bank, the Swedish Riksbank, the Swiss National Bank and the Bank of England, as well as representatives for the Bank of Japan).

Wallenberg has their own arbitration court

The SCC has always been independent. We were founded in 1917 as an independent entity within the Stockholm Chamber of Commerce and have worked without commercial or political interests ever since. This forms a key part of our history, but it is also important as we look to the future.  

https://sccarbitrationinstitute.se/en/about-scc/our-history

Per Jacobsson Foundation

The Per Jacobsson Foundation was established in 1963 to carry forward the work of international cooperation in the monetary and economic field to which Mr. Jacobsson had devoted his life. The institutions with which he was closely associated for over 30 years-the Bank for International Settlements and the International Monetary Fund-participated in this endeavor. The establishment of the Foundation had the full cooperation of Per Jacobsson’s family, and was widely supported, as reflected in the list of the original sponsors.

Marcus Wallenberg is Director and Founding Honorary Chairmen och the Per Jacobsson Foundation

http://www.perjacobsson.org/per-jacobsson.htm