The Institut International d'Etudes Bancaires (IIEB) was established after World War II to promote closer relations between financial institutions - the Financial Times reported.
According to the Financial Times, for more than 7 decades, the top-secret and influential organization has gathered Europe's largest bank heads twice a year at luxury hotels and royal palaces across the continent to discuss global policy making and many other issues.
The article emphasizes that IIEB's existence is almost unknown to outside its members, while IIEB does not have a website and its meeting agenda is not made public. Members are not encouraged to share details about the discussions.
This is not like Davos, where anyone can attend. This organization is truly autonomous, a longtime member told the Financial Times.
Some members have complained about the lack of transparency of the group - which was established to encourage closer ties between banks at a time of geopolitical tensions and challenges to financial stability across Europe.
We have been a member for decades as the body that brings European banks closer together, said Par Boman, president of Swedish bank Handelsbank. But after the financial crisis, we felt its waste and lack of transparency were not in line with our value.
According to the article, IIEB was founded in Paris in 1950 by the heads of four lending institutions across the continent - French government-owned Credit Industriel Commercial, Swiss Union Bank, Belgian company Generale de Belgique and Dutch bank Amsterdamsche. The purpose of IIEB is to organize regular high-level discussions on the development of the banking sector, as well as the economy and monetary system.
The topics of the discussion are said to have reflected concerns of European bankers at certain times. For example, in the 1950s, subsidiaries were formed in the former colonies, while by the 1960s, attention had shifted to the global role of the US dollar, problems with the fixed exchange rate system of Bretton Woods and the threat of the US taking over European banks.
The Financial Times wrote: At the end of the century, IIEB's discussions have paid more attention to the impact of the euro, the growing derivatives market and M&A deals between major banks.
As lenders in Europe are under pressure to improve their lackluster valuations which have fallen far behind US rivals in terms of profits in recent years and with the continent preparing for a long-standing wave of cross-border transactions, IIEB is entering one of the most important stages since its establishment after World War II, the newspaper wrote.
According to the Financial Times, in addition to being a forum where Europe's leading financial institutions can exchange ideas, IIEB also acts as a social club for the upper class - couples of bank owners who can enjoy evening parties, private tours to historical sites and high-end shopping tours.
The newspaper noted that almost no media outlet reported on IIEB's activities throughout its more than seven decades of existence, despite the importance of the topics being discussed.
