Tower of Basel: The Shadowy History of the Secret Bank that Runs the World by Adam LeBor by Adam LeBorMy rating: 3 of 5 stars
Adam LeBor’s “Tower of Basel: The Shadowy History of the Secret Bank that Runs the World" provides a gripping examination of the secretive Bank for International Settlements (BIS). Known as “the central bank of central banks”, and headquartered at the BIS Tower in Basel, it serves as a hub where central bankers from around the world convene to discuss and influence monetary policy.
The book chronicles the BIS’s involvement in major historical events. It was originally formed in 1930 to manage Germany’s World War I reparations, which Germany stopped paying after a few years, provide a meeting place for central bankers and provide overview and clearance of the gold possessions of central banks.
The book focuses on World War II, when the bank controversially facilitated transactions for the Axis powers. LeBor’s research into the bank’s murky wartime history, particularly its dealings with Nazi gold, remains a compelling and chilling part of the narrative. The BIS’s willingness to hold and manage gold stolen by the Nazis from occupied countries raises enduring ethical questions about international finance’s relationship to morality. This troubling chapter in the bank’s history reflects broader concerns about how financial institutions can sometimes prioritize business interests over humanitarian principles.
However, after the war the BIS survived by reinventing itself as part of the Marshall plan, and the re-industrialisation of West Germany. The BIS played a role in the creation of the European Monetary Union, providing the intellectual and institutional backbone for the euro's eventual launch. Through the Delors Committee and later the European Monetary Institute (EMI), the BIS helped develop the groundwork for a unified European currency, working closely with key central bankers. LeBor suggests that the bank's expertise and ability to bring together policymakers from different nations were instrumental in overcoming the technical and political hurdles that stood in the way of a single currency.
LeBor explores the modern role of the BIS, particularly its focus on financial stability and regulation. In recent years, the BIS has helped steer discussions on standards regarding capital requirements for banks, risk management, and crisis preparedness. However, critics argue that these standards have been too lax in preventing large-scale collapses, as evidenced by the 2008 financial crisis.
LeBor also draws attention to the tension within the BIS itself, as it operates both as a private, profit-driven bank for its central bank shareholders and as a public institution concerned with global financial stability. This dual identity has sparked controversy, particularly around the BIS’s lack of transparency and accountability. Despite this, central bankers still flock to Basel, where they engage in discussions about economic policy, capital levels, and currency stability. These meetings, while not making binding decisions, provide a forum for cooperation in the global financial system.
While the author traces the BIS influence, especially during its early days, the book shows that the institution today functions more as a coordinator and facilitator rather than the secret controller of world finance. Its role is more akin to that of a think tank.
LeBor argues that the BIS must become more transparent and accountable if it is to avoid becoming obsolete. At the same time, he highlights the reality that dismantling such an institution is easier said than done; once international organizations like the BIS are established, they tend to persist, even if their original purpose has faded.
While the book’s subtitle promises explosive revelations about the power of the BIS, readers may find that the bank’s level of influence is overstated at later points in its history. The IMF, the World Bank, the ECB, the Federal Reserve, and various national governments play a more dominant role in shaping global financial policy.
That said, “Tower of Basel” is a well- researched and thought-provoking exploration of one of the world’s most secretive financial institutions, and worth a read for those interested in world finance.
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