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The WIR Bank, formerly the Swiss Economic Circle (
German German(s) may refer to: * Germany (of or related to) **Germania (historical use) * Germans, citizens of Germany, people of German ancestry, or native speakers of the German language ** For citizens of Germany, see also German nationality law **Ge ...
: ''Wirtschaftsring-Genossenschaft''), or WIR, is an independent
complementary currency A complementary currency is a currency or medium of exchange that is not necessarily a national currency, but that is thought of as supplementing or complementing national currencies. Complementary currencies are usually not legal tender and thei ...
system in
Switzerland ). Swiss law does not designate a ''capital'' as such, but the federal parliament and government are installed in Bern, while other federal institutions, such as the federal courts, are in other cities (Bellinzona, Lausanne, Luzern, Neuchâtel ...
that serves businesses in hospitality, construction, manufacturing, retail and professional services. WIR issues and manages a private currency, called the WIR franc, which is used in combination with the
Swiss franc The Swiss franc is the currency and legal tender of Switzerland and Liechtenstein. It is also legal tender in the Italian exclave of Campione d'Italia which is surrounded by Swiss territory. The Swiss National Bank (SNB) issues banknotes and the ...
to generate dual-currency transactions.


System

The WIR franc is an electronic currency reflected in clients' trade accounts and so there is no paper money. The intentions of starting were in increased sales, cash flow and profits for a qualified participant. WIR created a credit system which issues credit, in WIR francs, to its members. The credit lines are secured by members pledging assets which ensures that the currency is asset-backed. When two members enter into a transaction with both Swiss francs and WIR francs it reduces the amount of cash needed by the buyer; the seller does not discount its product or service.


Currencies

The WIR Bank is the centreal banking authority for currency funds:


History

WIR was founded in 1934 by businessmen Werner Zimmermann and Paul Enz as a result of currency shortages and global financial instability. A
banking license A banking licence is a legal prerequisite for a financial institution that wants to carry on a banking business. Under the laws of most jurisdictions, a business is not permitted to carry words like a ''bank'', ''insurance'', ''national'' in th ...
was granted in 1936. Both Zimmermann and Enz had been influenced by
German German(s) may refer to: * Germany (of or related to) **Germania (historical use) * Germans, citizens of Germany, people of German ancestry, or native speakers of the German language ** For citizens of Germany, see also German nationality law **Ge ...
Georgist Georgism, also called in modern times Geoism, and known historically as the single tax movement, is an economic ideology holding that, although people should own the value they produce themselves, the economic rent derived from Land (economics), ...
economist An economist is a professional and practitioner in the social sciences, social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this ...
Silvio Gesell Johann Silvio Gesell (; 17 March 1862 – 11 March 1930) was a German-Argentine economist, merchant, and the founder of Freiwirtschaft, an economic model for market socialism. In 1900 he founded the magazine ''Geld-und Bodenreform'' (''Monetary ...
; however, the WIR Bank renounced Gesell's " free money" theory in 1952, opening the door to monetary
interest In finance and economics, interest is payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum (that is, the amount borrowed), at a particular rate. It is distin ...
. "WIR" is both an abbreviation of ''Wirtschaftsring'' and the word for "we" in German, reminding participants that the economic circle is also a community. According to the cooperative's statutes, "Its purpose is to encourage participating members to put their buying power at each other's disposal and keep it circulating within their ranks, thereby providing members with additional sales volume." Initially in keeping with Gesell's "free money" doctrine, the Economic Circle circulated certificates with negative monthly interest rates enforced through a required monthly stamp on the reverse side of certificates. This feature, called demurrage was aimed at preventing hoarding while avoiding constant devaluation of the currency. This practice was eventually ended in 1948. Although WIR started with only sixteen members, today it has grown to include 62,000. Total assets are approximately 3.0 billion CHF, annual sales in the range of 6.5 billion, as of 2005. As of 1998, assets held by the credit system were 885 million and liabilities of 844 million, i.e. the circulating WIR money, with equity in the system of 44 million. These WIR obligations being interest free have a cost of zero. Income from interest and credit clearing activities were 38 million francs. The WIR Bank was a not-for-profit entity, although that status changed during the Bank's expansion. The bank considers themselves as stable, claiming being fully operational during times of general economic crisis and may dampen downturns in the business cycle, helping to stabilize the Swiss economy during difficult times.Stodder, James. , Proceedings of the IEEE Engineering Management Society Conference, Albuquerque, New Mexico, August 2000. It is cited as an example in the documentary film '' Tomorrow (Demain)'' (2015).


See also

* JAK Members Bank which was part of the WIR's inspiration.


References


External links

*
WIR Report by Erick B. Hansch, 1971

WIR Bank Video Report by Giorgio Simonetti, RAI television [Italian]
*

Essay by James Stodder and Bernard Lietaer. Published in ''Die Welt der Commons - Muster des gemeinsamen Handelns'', Transcript-Verlag, Germany, 205. {{Portal bar, Switzerland, Economy, Banks Local currencies Freiwirtschaft Banks of Switzerland Basel-Stadt