abandoned. Instead of merging Zachodni Bank with the WBV branches, they decided to create a brand new bank under Polish law, independent of all other Polish banks, to be named Powszechny Bank Zwiazkowy w Polsce or Société Générale de Banque in Poland (SGBP). The minister was prepared to grant the bank a licence on several conditions: firstly, that a substantial part of the bank s capital would be held by Polish nationals; secondly, that Polish interests would occupy a majority of seats on the Board of Directors; third, that part of the capital would be used to buy Polish government bonds; and fourth, that the new bank would set up offices in Warsaw as soon as possible.

The WBV management put forward a formal plan to BBE management in August 1921. BBE sent over one of their managers, Fernand Baetens, to take a closer look. He came back brimming with enthusiasm, stating: The WBV branches are really thriving. In the current year they re making 300 to 400% on their capital. The organisation is very sound and the manager in Cracow who has been with WBV for 28 years, has been working in Poland for 18 years and is of Polish extraction has all the necessary attributes to head up the new bank 7.

They reached agreement on the respective shareholding each of the two banks would have in the new establishment: WBV s stake was to be double BBE s holding. In addition to providing capital, BBE agreed to do everything it could to obtain for SGBP the for- eign credit required to meet the needs of its commercial and industrial clientele 8. On this basis BBE and WBV submitted a request to Finance Minister Jan Kanty Steczkowski for a banking licence.

However, the establishment of the bank was delayed by financial and political insta- bility. Decentralisation and the absence of a single national currency were hindering the development of the country, in which Ukrainian, Czech, Russian, German and Lithuanian minority groups actually made up 30% of the total population. In October 1921, a new Finance Minister, Jerzy Michalski, took over from Steczkowski before he had given his formal approval for a licence, so BBE-WBV had to start the application procedures again from scratch. Then, at a meeting on 14 December 1921, Michalski explained that he was not going to allow the creation of any new banks unless they could convince him that this would be of benefit to the Polish Treasury.

One of the reasons that these negotiations took so long was that this would be the first time in the history of the young Republic that a banking licence was granted to foreigners, which would set a precedent for the future of banking in Poland. The project also faced formidable opposition from the powerful Bank Handlowy w Warszawie (Warsaw Bank of Commerce), a partner of Paribas in the Banque Franco-Polonaise, which itself cherished ambitions to acquire the WBV subsidiaries by offering WBV and perhaps also BBE the

7. State Archives of the Kingdom of Belgium Vol II, BBE, n° 81-82, memo of 10 October 1921

8. State Archives of the Kingdom of Belgium Vol II, BBE, n° 81-82, draft letter from BBE to WBV, November 22, referring to a note of 2 August 1922