Institute of International Finance

Created in 1983 in response to the international debt crisis, the IIF prides itself on being "the world's only global association of financial institutions" according to Charles H. Dallara, its managing director since 1993. "The IIF has evolved to meet the changing needs of the financial community, and its members include most of world's largest commercial banks and investment banks, as well as a growing number of insurance companies and investment management firms, in all 320 members headquartered in more than 60 countries."

What Dallara, the former assistant secretary of the U.S. Treasury, doesn't say: their rival, the half-century-old IMC, has lost much of its international relevance because most major financial institutions of the world have put their eggs into the IIF basket. This way the IIF has become the most powerful lobbying platform to protect the business interests of the "global players" in a world of evermore expanding private capital flows.

Looking at the Berlin meetings of the IMC and IIF, the turmoil in global finance over the recent decades has left its mark.

First, due to mergers and the integration of commercial and investment banking, many of the big names in global banking are gone. In a move of self-preservation, the IMC opened its doors to a broad range of financial institutions. Chairmen and presidents of investment firms, insurance companies, and other financial conglomerates are stabilizing the IMC's membership. Now, about eighty banks and other financial institutions keep the IMC afloat. Some of the top bankers, such as Lloyds TSB Group's Maarten van den Bergh, propose merging both banker's clubs for reasons of efficiency.

Second, as the "big players" in global finance built up the IIF as their main international research and lobbying platform, they opted for a new division of labor: They use the IMC's seclusive annual meeting for the CEOs--accompanied by their spouses--to meet socially in the setting of a closed conference where they can mingle with top central bankers, supervisors, and other high finance officials. They let the IIF--with a much broader membership--do the global research, coordination, and lobby work. Top bank leaders such as Sir John Bond, the outgoing Group Chairman of HSBC, and Josef Ackermann, chief executive of Deutsche Bank, are calling the shots at both powerful banking clubs. At the Berlin meeting, Deutsche Bank head Ackermann took over the chairmanship of the IIF from--you guessed--HSBC boss Sir John Bond.

Third, this explains why the IMC board kicked out the small financial press contingent that over decades has been attending the annual meetings in all parts of the world. That happened two years ago, at the Ritz Carlton in Singapore, under the presidency of Douglas A. Warner III, then chairman of the board of J.P. Morgan Chase & Co., who made millions by merging his bank. The exception under the new rule: The press is allowed to attend the central bank governors panel.