The Bank of International Settlements1

The international masked image of exchange values exploitation

Summary: 1. What is the Bank of International Settlements and how does it work?, 2. Where is the
BIS coming from and where is it going to? 3. What are the consequences of finance economy
expressed in this bank of banks?

1. What is the Bank of International Settlements and how does it work?

The BIS is an international organization structured as an anonymous joint-stock company (from the
corporate website is not public the list of the shareholders) with a Board of Directors and an Executive
Director. However, its shares can be subscribed only by central banks or designated financial
institutions (the decision is up to the central banks since the shares do not entail voting rights).
Currently, own shares, and are therefore represented in the meetings of the General Assembly 60
central banks, including the ECB. The BIS shares are traded on stock markets, which made the bank
an unusual organization: an international organization (in the technical sense of public international
law), yet allowed for private shareholders. A typical treat of a bourgeois for profit and exploitation
organization. It is built like Chinese boxes. On the first level, the shallow one, there is the Board of
Directors (BODs) drawn from the eight European central banks (England, Switzerland, Germany,
Italy, France, Belgium, Sweden, and the Netherlands). The second level is the so-called G-10, that has
eleven members2. It also has one unofficial member: the governor of the Saudi Arabian Monetary
Authority. The third level is the MEDD (Monetary and Economic Development Department), which
is a private think tank (The vanguard of bourgeois ideology). This unit produces economic works that
provide central bankers from around the world, even though they are not BIS members. It was born
in 1930 and, since then, the power of financial capitalism had another far reaching plan, nothing less
than to create a world system of financial control in private hands able to dominate the political system
of each country and the economy of the world as a whole. This system was to be controlled in a
feudalistic fashion by the central banks of the world acting in concert, by secret agreements arrived at
in frequent meetings and conferences. The apex of the system was to be the Bank for International
Settlements in Basle, Switzerland, a private bank owned and controlled by the worlds central banks,
which were themselves private corporations. Each central bank [] sought to dominate its
government by its ability to control treasury loans, to manipulate foreign exchanges, to influence the

1 This is to be included within the framework, critique and methodology of the original research project. Therefore, more
space will be given to BIS, G-10 and IMF and less to other organizations taken into account. However, I keep the general
concept developed then.
2 The members are: Belgium, Canada, France, Germany, Italy, Japan, Netherland, Sweden, Switzerland, United Kingdom

and United States. The Group of Ten or G-10 refers to the group of countries that agreed to participate in the General
Arrangements to Borrow (GAB), an agreement to provide the International Monetary Fund with additional funds to
increase its lending ability. The GAB was established in 1962, when the governments of eight International Monetary Fund
(IMF) membersBelgium, Canada, France, Italy, Japan, the Netherlands, the United Kingdom, and the United States
and the central banks of two others, Germany and Sweden, agreed to make resources available to the IMF with an
additional $6 billion of their resources. The additional money was intended to allow the IMF to have increased lending
resources. In 1964, the funds were used by the IMF to rescue the Pound sterling. The G-10 grew in 1964 by the association
of the eleventh member, Switzerland, then a nonmember of the Fund, but the name of the G10 remained the same. The
Group of Ten signed the Smithsonian Agreement in December 1971, replacing the world's fixed exchange rate regime
with a floating exchange rate regime. Furthermore, The GAB enables the IMF to borrow specified amounts of currencies
from these 11 industrial countries (or their central banks), under certain circumstances. However, it is impossible to think
the BIS without the activity of IMF.

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 Dario Cositore

level of economic activity in the country, and to influence co-operative politicians by subsequent
rewards in the business world3. Moreover, the 95% of world GDP is represented by BIS.

BIS aims are:

1. Foster cooperation with central banks.

2. Regulate capital adequacy4.
3. Assure liquid assets.
4. Limit loans (debit)5.
5. Determine daily the interest rates,
6. Decide money supply of the banks in their own countries.

Furthermore, the BIS has two specific characteristics:

7. Operate as a trustee in connection with international financial operations.

8. The Bank (and its employees) has a legal immunity (they can not be judged) and the immunity of
goods execution (they can not be confiscated). The immunity is extended to all criminal matters, and
allow exceptions for specific waivers of stakeholders or civil and commercial actions resulting from
banking or financial transactions (a rule does not apply or is inapplicable by virtue of another norm).
So, members of the institution, as well as its goods, enjoy absolute immunity.

Historically, the BIS has established certain standards that have favored, on one hand, borrowing
money to landowners (owners of the land and its resources), so that is encouraging the rent of land,
and on the other, borrowing money to big capitalists (owners of the means of production and part of
the means of subsistence), so that is encouraging profit and interest. In other words, it allowed the
process of capitalist production to continue reproducing itself, and proceeded to strip and beat up
tens of millions of cattle called proletariat (that is, those who sell their lifetime in exchange for a
wage that will allow them to buy goods and/or services in order to reproduce themselves as proletariat,
and to re-set the cycle again). No coincidence that the representative of the ruling bourgeois class,
John M. Keynes, opposed the liquidation of the bank, at Bretton Woods in 1944.

3 Quigley, Tragedy & Hope, (MacMillan, 1966), p. 308.

4 Capital adequacy applies to equity (stock) and capital assets (It includes all kinds of property, movable or immovable,
tangible or intangible, fixed, circulating, constant or variable). Thus, land and building, plant and machinery, motorcar,
furniture, jewelry, route permits, goodwill, tenancy rights, patents, trademarks, shares, debentures, securities, units, mutual
funds, zero-coupon bonds, etc.). Those could be overvalued in many circumstances. On one side, because they do not
reflect the current conditions of the market and, on the other side, because it is not possible to estimate the real risk of any
position of trading. Consequently, Basel norms (Basel III, 2010-2011) requires that the ratio among international banks
capitals is above the minimum. Doing so, the ruling class assures the withstanding of the banking sector. In an international
point of view, the capital adequacy is the key to the central banks to reduce and keep under control of capitalist crisis, viz.
overproduction crisis. Capital Adequacy Ratio is the ratio of a banks capital to its risk.
5From the previous points, it is clear the the BIS has to guarantee a specific money (value) flow, a reserve.
Although, a reserve is a relation. A relation between M and M. A relation between current money and
future money (ideal), paid along with an interest. Money that generates money. Here, the production of use
values that is the real base upon which money comes to birth is completely mystified by money. Appears, on
the surface, that the money is causa sui. Appears that the money, like God in many religions, thinks itself,
wants itself and generates itself.

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The Bank of International Settlements
The international masked image of exchange values exploitation

2. Where is the BIS coming from and where is it going to?

The selective internationalization of production, i.e. the gates open in the foreign trade by capitalist
production, was followed by the globalization of capital markets and currencies, namely the
generalization of the capitalist mode of production. A market where it appears that the ratings, pricing
generate real values (those determined by the labor time). We know that man does not question
himself as long as the living conditions are not ripe for it or, at least, are not already under formation.
It is in this sense had developed finance. The conditions for the emergence of such products (those
of finance), which would allow the ruling class a more violent looting, had long been dormant. But,
their pressure has manifested itself more and more, from the outbreak of world wars to the
reorganization of the entire capitalist world of production. Among the conditions of the real base on
which stand such products, i.e. the conditions in which the dominant class reacted in order to conserve
and expand as exploiting class we find:

1. Several overproduction crisis

2. The fall of the average rate of profits
3. The need to outsource production costs
4. The exponential increase of the speed of production - which requires an equally-speed cycle of
capital (M-C-M '... C-M-C). As to say, it requires a greater wealth for a few in exchange for greater
poverty for many.
5. The increase in public debt.

Those are some of the factors behind the explosion of financial speculation. Exactly, speculation over
the productive reality, instead of a reflection of it. This has led to a growing influence of exchange
values (all the various forms of money - stocks, derivatives, currencies, etc.) on use values. The image
of things is increasingly replacing things. But, for the ruling bourgeois class, it is a natural process. The
image is the thing of the bourgeois; so that the bourgeois is the image of the thing. In other words, the
bourgeois life deletes the difference between the thing and the image, because image is everything.
Among the imaginative forms of wealth of men, which are nothing more than the wealth of their
needs, we have, in fact, various forms of exchange values. Thus, the wealth of the needs of men come
equivalent to the wealth of forms of exchange values. All this on a global scale. Financial globalization,
therefore, is the bearer of new functional antagonism of international class to a new division of labor
on a global scale. The finance, being based on exchange values, has therefore largely replaced the real
economy (at least in Western countries). The control on use values (goods and/or services), which
first took place through institutional control (control with weapons), have been largely replaced, with
the control and the exchange values. This process is strictly the reflection and the generalization of
the capitalist mode of production. Because, as well as the work goes from being less and less concrete
in favor of the abstractness of production, as there is less and less direct relationship between the wage
slave and the benevolent, just, moral and smiling master, so, likewise, there has always been less need
of direct and close control over the territory (colonialism), in favor of an indirect and remote control
of the areas from which the values of use originate and that, at this point, only serve to ensure the
magnified financial bubbles (imperialism). In other words, these remote-controlled and enslaved areas
within the international division of labor, are functional to the capitalists who exploit those resources
to convert social surplus values into profit, into capital. As to say, convert global exploitation in its
various forms (increase of working hours, increased debt, welfare, social and reception centers,
increase of products per the time of labour), in the supremacy over production. As a result, we should
expect bigger and bigger bubbles and increasingly dangerous until the next stall; which, as usual in
capitalist production, is going back surpassing. That is, the capitalist mode of production reforms or reacts
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 Dario Cositore

to the crisis of overproduction generated by it merely healing the effects of its production while
preserving the causes. The crisis in solved in the particular, but is kept in the general, throwing back
the clock of human history. Throwing back the clock of history of men means destroying, freezing or
delaying the productive forces or their further development.

3. What are the consequences of finance economy expressed in this bank of banks?

1. The change in income distribution (increase in the share of individual profits including dividends,
interest rates, financial income). In general, this type of annuities remain within the finance and are
not reinvested in the production of use values, the only value of use of these products is their exchange
value. As a result, investments are slipping from the production of use values to the production of
exchange values. Without injection of investment, the technology sector remains stalled. Therefore,
capital is forced, since it can not take advantage of the relative surplus value, to increase the absolute
surplus value and barbarously automate and outsource the production costs (put the counter-
tendencies to the fall of the rate of profit). So, the money that goes to the market, the variable and
circulation capital, is less money as capital. It is less money invested, but it is more money spent
(proportionally). Grafting the evolution of a new man: homo consumericus6. This trend says that the
producer and the consumer are even more polarizing. Sometimes, in order to solve the overproduction
crisis, there is still some petty-bourgeois ideology jolt that says that we need more entrepreneurship,
more business. Therefore, the debt, which is one of the cornerstones of capitalist production, is
exacerbated. The sub-prime crisis was not a coincidence. Because, being there a colossal disproportion
between the production of use-values and that of exchange values, the first production will never
really guarantee for the second. This happens to the extent that the money-currency is increasingly
spent - and not invested, and, money-currency coming from the production of use-values, it is always
less. So, it makes wages to fall, for both frequency and quantity, influencing also the cycle of money.
Thats the reason why they focus only on the short-term (the financial leaders), and that is also the
reason why they lend money-currency even to those who would not have all it takes to pay the amount
plus its and further theft, namely interest. The burden of capital competition is charged, in this way,
by less productive companies (nations). Thats the reason why there is a lack of investment in the
sector of use values, while still innovation in the finance sector. Because, it is unprofitable to invest in
the production of use values where depreciation costs are relatively long and unpredictable, and with
relatively low profit margins for the ruling bourgeois class. Thus, nations, companies, corporations,
institutions, pay, even with life, those vampires who suck the blood of the rest of the dying.

2. Horizontal antagonism between finance and industry and vertical antagonism between wage slavery
and capital. The productive work splits and enters increasingly in contradiction with the organizational
work (command: order and control), that is, among the simple workers (skilled, unskilled, researchers,
pioneers, etc.) and complex workers (managers, directors, framework, etc.). The separate command
from the production, i.e. the order and control that are reconciled formally within an executive
manager, is the sensible image of the contradiction of capitalist production. The contradiction of the
production of values is reflected in the contradiction of its organization.

3. Focus on short-term profits, a brevity directly proportional to the speed of production. This is
another indicator that capitalist production is no longer able to sustain itself. The finance age brings
us back to when the ruling class could not develop in the absence of a monetary economy. It takes us

6Vedi le mie sezioni sullantropoligia nel progetto per una teoria storica della complessit. Inoltre, G. Saad,
The Evolutionary Bases of Consumption e G. Lipovetsky, Le Bonheur Paradoxal.

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The Bank of International Settlements
The international masked image of exchange values exploitation

back to when the limit of the development of production, because it was based on agriculture per se,
was the consumption of the agricultural surplus product. This is a real feudal recoil of capitalism. Not
surprisingly, the more capitalism goes beyond its crisis the more it goes back in time. In fact, today,
there are people who print 3D organs while, on the other side, there are people who have recently
passed the Neolithic revolution.