175 years of the National Bank of Belgium

The National Bank of Belgium (NBB) came into being 175 years ago. Indeed, it was on 5 May 1850 that Leopold I signed the law establishing the National Bank.

The Bank’s tasks, operations and structure have changed over the years, in line with economic, technological and political developments. However, one thing has remained constant throughout the Bank’s 175 years of existence: a desire to serve the interests of society, the country and the economic and financial system to the best of its abilities.

Summing up the Bank’s riveting history in a brief press release is no small feat. Much ink has already been spilled on this subject, but here are a few key dates and milestones:

• The National Bank did not see the light of day until two decades after the creation of Belgium. This was mainly because foreign currencies were used in the newly minted state, with the issuance of banknotes initially entrusted to private banks such as the Société Générale de Belgique. It was only after the economic crisis of 1848, which brought to the fore the fragility of the financial system and its inability to adequately support the economy, that the country’s finance minister, Walthère Frère-Orban, decided the time had come to create a central bank, which was founded in 1850. Its main tasks were to ensure currency unification, improve access to trade credit, manage foreign exchange reserves and act as the government’s cashier.
• In 1851, the National Bank issued its first banknotes. The 1,000 Belgian franc note, the largest denomination at the time, would be worth more than 8,000 euros today. Each banknote was signed by hand.
• Belgian banknotes were not officially recognised as legal tender until 1873. Prior thereto, no one was obliged to accept them. This changed when the National Bank was granted a right of issue in 1873. The Bank lost this right twice, during the two world wars, and the Belgian franc was replaced by wartime currency.
• In 1900, the National Bank became the National Bank of Belgium. The politician Charles de Brouckère had founded a commercial bank called the Banque de Belgique (“Bank of Belgium”) in 1835. This bank, which was wound up in 1885, was a shareholder in the National Bank. To avoid confusion, the National Bank’s name was only changed after the disappearance of the Banque de Belgique from the financial scene.
• The National Bank’s governor has sat on the Board of Directors of the Bank for International Settlements (BIS), often referred to as the “bank for central banks”, since its creation in 1930.
• In 1935, a monetary agreement authorising the Bank to set up a branch in Luxembourg was signed. The Belgian franc thus became legal tender in the Grand Duchy, thereby extending the Belgium-Luxembourg Economic Union created in 1921.
• 1944 was an annus horribilis in the Bank’s history due to the monetary reform and consolidation brought about by Operation Gutt.
• Also in 1944, Belgium joined the new international monetary order established at the Bretton Woods Conference. The Bank has worked with the IMF ever since.
• The National Bank was set up in the form of a public limited company with a specific legal status, organs and operating rules, to carry out tasks in the public interest. For many years, it had only private shareholders. In the nineteenth century, one of its main shareholders was the well-known French writer Victor Hugo. Since 1948, half of the Bank’s shares have been held by the Belgian state.
• In 1954, the Bank launched what was to become one of its many research channels, a monthly survey of business leaders to take the pulse of the economy.
• The Bank performs a number of tasks that are not included in the typical remit of a central bank. For example, at the government’s request, it has operated the Central Balance Sheet Office since 1978. The Bank is also responsible for the Individual Credit Register, which contains information on consumer credit, mortgage loans and bad debtors.
• The third stage of European Monetary Union was launched on 1 January 1999. Since then, the Bank’s governor has taken part in the ECB’s monetary policy meetings. In this way, the Bank actively contributes to the preparation and implementation of monetary policy decisions at European level.
• In 2002, Belgium bade farewell to the Belgian franc and became one of twelve countries to introduce the euro. This was a logistical feat for the Bank. The last Belgian franc banknotes put into circulation paid tribute to James Ensor, Adolphe Sax, René Magritte, Constant Permeke and Victor Horta. The 10,000 franc note featured the royal couple, King Albert II and Queen Paola.
• Since 1 April 2011, the Bank has been one of the country’s two financial supervisory authorities, alongside the FSMA. In this capacity, it makes a substantial contribution to financial stability. The Bank is responsible for ensuring prudential supervision of the institutions falling within its remit. It also sets macroprudential policy and intervenes in the event of a crisis or if the resolution of a financial operator proves necessary.
• At the end of 2018, the Bank’s last two branch offices (in Kortrijk and Liège) closed their doors. At its peak in the interwar years, the Bank had no fewer than 43 branches.
• In 2020, the last banknotes rolled off the Bank’s presses. Since then, the Bank has relied on the printing works of the Austrian and Portuguese national banks for its share of euro banknote production.
• After 175 years, the Bank is preparing to transfer its cash activities from the centre of the capital to the outskirts of Brussels. A new cash centre will soon be inaugurated in Zellik.
• On a daily basis, the Bank’s statistics, financial information, surveys, reports and conferences contribute to social debate and to the public’s understanding of financial and economic affairs. The Bank’s strategic development is driven by its recognised expertise, reliable data, ability to adapt to its operating environment and independence.

The Bank has planned a modest celebration to mark its 175^th anniversary.

If this journey back in time has piqued your curiosity, be sure to visit the Museum of the National Bank of Belgium where you can learn more about the historyof our venerable institution.