As regards Paribas, Horace Finaly2 and a fellow-director at the bank, Jules Chevalier, very quickly grasped that all the territories along the Danube would be faced with serious eco- nomic difficulties unless a degree of economic coherence could be maintained between them. With the support, perhaps even at the instigation, of France s Ministry of Finance, Paribas took control of a Vienna-based bank, k.k. privilegierte Österreichische Länder- bank (Royal Chartered Austrian States Bank), re-locating its headquarters to Paris in 1921 and renaming it Banque des Pays de l Europe Centrale (Central European States Bank). We will return later to this event, which resulted in Paribas establishing a pres- ence in Czechoslovakia, Romania and Poland.

Meanwhile in Belgium, in 1919 several top managers at the Société Générale de Belgique Group took part in the work of two commissions set up by the Minister of Foreign Affairs, Paul Hymans. One commission was given the brief of reviewing the country s consular organisation, while the other was tasked to study ways and means of developing Bel- gium s export trade. It was agreed that the SGB Group, through its BBE subsidiary, would assist trade growth by setting up branches in a number of countries. This is how BBE came to expand very fast in Eastern Europe. In 1919-1920, the bank opened branches in Bucharest and Braila. When Banque de l Union Parisienne (BUP), a French merchant bank with which Société Générale de Belgique had had links since its foundation in 1904, expressed disappointment that the Belgian Group had set up in Romania without inviting BUP to participate, the Governor of SGB, Jean Jadot, explained BBE s new policy regarding Belgian expansion to the BUP Chief Executive Lucien Villars: The Belgian government sees it as extremely importance that BBE whether by itself or through subsidiaries in which the bank has major influence should be established in every country in which Belgian firms have business interests 3.

In fact BBE did not open branches of its own in other Eastern European countries, pre- ferring instead to collaborate with a Viennese bank, the Wiener Bankverein (WBV). This bank had been established in 1869 and had since become one of the leading financial institutions in Austria in terms of capitalisation, possessing branches in all the sovereign states that had arisen from the break-up of the Austro-Hungarian Empire. Bowing to the nationalist sentiment prevalent in these new republics, WBV planned to turn its branches there into subsidiary companies. In order to do so however, the bank would require funds at a moment when it had been considerably weakened by the war.

BBE and WBV rapidly formed an extremely cordial and trusting relationship. It was agreed that the SGB-BBE group would help to finance the development of the WBV group in two stages. In 1920, Société Générale de Belgique underwrote a capital increase for the Vien- nese bank, taking a 15% stake for itself. In a second phase, BBE took direct stakes in the various banks set up by WBV by transforming its branch networks in Czechoslovakia,

2. Managing Director of Paribas from 1919 to 1937.

3. State Archives of the Kingdom of Belgium Vol II, SGB 4, n° 3568-3570, Jean Jadot to Lucien Villars, 27 June 1919.