guy quaden : the national bank of belgium - a century and a half of belgian and european history introductory statement by mr guy quaden, governor of the national bank of belgium, at a symposium on the history of the national bank of belgium, brussels, 22 november 2005. * * * ladies and gentlemen, when belgium celebrated its 175th anniversary, the national bank naturally joined in. thus, we sponsored an exhibition on “ la belgique visionnaire ”, and today we are publishing a book on the history of the bank, together with a set of detailed articles on the period 1940 – 1971. the history of the bank is closely intertwined with that of the belgian state. however, while the kingdom of belgium is celebrating its 175th anniversary this year, the bank is only – might i say – celebrating its 155th birthday. during the first twenty years of belgium ’ s existence, banknotes were issued by several private banks, mainly the societe generale, founded in 1822 under the orangist regime, and its principal rival, the banque de belgique, established in 1835. the financial crisis of 1848 led to the imposition of the ‘ compulsory rate ’ – i. e. the suspension of the right to exchange banknotes for precious metals – and paralysis of the discount credit system. at this time, a young, dynamic politician, walthere frere - orban, was appointed as minister of finance. drawing radical conclusions from the situation, he took action against the two big mixed banks which were monopolising financial power in the country. he forced them to amend their statutes, renouncing their right of issue together with certain discount activities in favour of a new institution, the national bank. by way of consolation, when the national bank was launched, the two big banks became the sole shareholders in the new company, established in the form of a private limited liability company. all the same, at the time of its establishment the national bank was not the mere puppet of the big private banks. thus, the governor, the linchpin of the system, was appointed by the king and the government also nominated a commissioner, making the institution different from its counterparts in neighbouring countries. in return for the right of issue, the state also received a substantial part of the bank ’ s revenue. the national bank has never been quite like other financial institutions or limited companies. minister frere - orban, addressing parliament in 1850, made the following statement which i have

sometimes had occasion to repeat in recent years : “ que voulons - nous en instituant une banque? nous voulons, non pas donner des benefices a des particuliers, non pas enrichir des actionnaires, mais nous instituons une banque dans l'interet public, dans l'interet general ”. ( what is our intention in setting up a bank? we do not want to give profits to individuals, nor do we want to enrich shareholders ; we are establishing a bank in the public interest, in the general interest ). like the other central banks of the day, however, the bank did combine functions in the public interest with commercial activities. the book being published today describes the long and sometimes bumpy road, leading from the issuing and discount institution created in the mid 19th century to the modern central bank which the national bank of belgium gradually became in the course of the 20th century. over the years, the bank underwent a metamorphosis, shaped by developments in the monetary and financial system, changing attitudes towards the role of government in economic life, and changes in the international context. it gradually phased out its commercial activities, becoming increasingly public in character, especially just before and just after world war ii. and the bank ’ s activities became international in scope. nowadays, the national bank of belgium performs its functions as a modern central bank within a european context : issuing banknotes, defining and implementing monetary policy, managing the official foreign exchange reserves, overseeing the payment systems and contributing to the stability of the financial sector. the bank has been a member of the eurosystem ever since it was launched in 1999. the national bank of belgium has always been pro - european. in accordance with our country ’ s motto, we believe that in union there is strength. at the national bank of belgium we are not at all nostalgic for a monetary sovereignty which has in any case become illusory in highly integrated small and medium - sized economies. the switch to a single monetary policy, decided on by the governing council of the european central bank, has not meant any loss of monetary power for belgium. quite the reverse. in reality, since the day when the government and the bank decided, fifteen years ago, to peg the belgian franc to the most stable european currency, belgium was in reality already importing its monetary policy from frankfurt. the difference is that, while our