New Crash Warning Comes From Proven Source
A warning over the global economy comes from the Bank for International Settlements – which voiced concerns before the last crash.
Monday 10 December 2012
The Bank for International Settlements (BIS) is an odd organisation. Originally set up in the 1930s to facilitate the payment of First World War reparations by Germany to France, Britain and others, it has since transformed into a club of central bankers.
What is less well-known is that it came within a whisker of being shut down after the Second World War. It had been tainted by the failure of the reparations policy and by the presence of prominent Nazis on its board. At the Bretton Woods conference in 1944, the Norwegians lobbied for it to be shut down – after all, aside from anything else, what purpose did it have any longer? The British argued against this, but were overruled by the Americans* and the conference agreed that the BIS would be shut down.
But in the event, the undertaking was forgotten and the BIS survived. And, many economists would argue, a good thing too. For today, the BIS is renowned for being one of the only international institutions to have warned us of the risks and imbalances which eventually led to the great financial crisis of 2008.