17 - Finance and financiers in Belgium, 1880–1940

Summary

The rise of industrial Belgium at the beginning of the nineteenth century was closely connected with the establishment of a banking system which, well before the French Crédit Mobilier or the German banks, channelled into key sectors of heavy industry the capital which was vitally necessary to modernize and expand it.

At the beginning of the 1880s, in an economic climate which had been generally unfavourable since 1873, the banking system was going through a period of rapid change. For some forty years the financial market had been dominated by two rival banks, the Société Générale and the Banque de Belgique. The financial crises of 1876 and 1885 swept away the Banque de Belgique and several less important institutions, with the result that the Société Générale found itself in a dominant position in a banking system whose universal character had been becoming more pronounced since 1870.

From 1880 onwards the country's chief banks lost their character as investment banks or holding companies and began to combine these activities with those of deposit banks. At this time, deposits already outstripped shareholders' funds in the eight existing mixed banks – they were respectively 227 and 144 million francs-while their investments reached some 184 million. Some fifty lesser institutions served as deposit banks, while a growing number of foreign banks and bankers were beginning to settle on Belgian soil.

Until 1895, Belgian banks were extremely cautious in their dealings with traditional industries, that is to say coal and steel.