Abstract

"Economic Diplomacy and Banking Policy in Allied-Occupied Germany, 1945–1955"

Robert Yee, University of Oxford (robert.andrew.yee@gmail.com)

With the collapse of the Third Reich in 1945, Germany no longer had a centralized budget, a functional central bank, or an overall regulatory framework. How, then, did the Allies, who oversaw four separate zones of occupation, craft a new economic policy for the divided nation? This presentation examines the debates over one aspect of governance: banking regulation in the decade after the war. It draws on archival material from France, Germany, the US, and the UK to show how officials, both German and Allied, proposed various models for the “decentralization” and “denazification” of the financial sector. In this effort, foreign ministries learned from (and contended with) the past regulatory legislation enacted during the Weimar Republic and Third Reich. Their subsequent reforms in the form of the Allied Banking Commission and the Bank deutscher Länder instituted a form of centralized regulatory administration, but one also compatible with Germany’s existing federal system. These negotiations not only came from the desire to achieve financial stability, but also reflected the growing concerns of geopolitical conflict at the onset of the Cold War.

More broadly, this argument sheds light on the extent to which regulatory policies can serve a public-oriented goal. Contemporary actors may have made few direct references to protecting consumers or small businesses through regulation, but their meeting minutes and correspondence reveal a concerted effort to improve collective economic security. The “public” they envisioned serving was neither a collection of individuals nor the leaders of business associations, but instead the strategic goals of the nascent Western Bloc. While also exploring the tensions and contradictions of this project, this paper evaluates the Allied occupation through the lens of banking.