The history of BCEE | Banque et Caisse d'Epargne de l'Etat, Luxembourg

The history of BCEE

1839

The Grand Duchy gains its independence

On 19 April 1839, Luxembourg achieves true independence with the signing of the Treaty of London, at the cost of two-thirds of its territory. Its population is reduced by half.
1842

Admission to the 'Zoll- und Handelsverein'

To escape its economic isolation, the Grand Duchy joins the ‘Zoll- und Handelsverein’ on 8 February 1842, thereby establishing an economic and custom union with Prussia.
1847

Introduction of the Luxembourg franc

In 1847, the Luxembourg franc becomes accounting money. The German taler is maintained.
1856

Founding of the Savings Bank ('Caisse d’Épargne')

On 21 February 1856, the Chamber of Deputies approves the framework act about the foundation of the Savings Bank ('Caisse d’Épargne'). Thus, the country’s first and only savings bank is established, which today is the oldest financial institution in the country. 1856 is a landmark year for the country’s economic expansion, marked by the construction of the railway company and the growth of the steel industry.
1858

Deposit guarantees

The framework law of 21 February 1856 was supplemented by a government guarantee on deposits with the Savings Bank, established by the law of 28 December 1858.
1859

Organisation of the Savings Bank

The bank’s organisation is initially governed by the regulation dated 17 February 1859. The first meeting of the Board of Directors, chaired by Professor Nic Martha and composed of three members, takes place on 18 August 1859. Its staff includes an accountant and an attendant. The Savings Bank is located at the Maison Ketter, in the rue Chimay in Luxembourg. Its first teller windows were located at Rue du Marché-aux-Herbes, the government’s former address and the present-day site of the Grand Ducal Palace.
1862

Foreign deposits

The Grand Ducal Order of 10 August 1862 allows foreigners to deposit at the Savings Bank.
1869

Increasing deposits

The Savings Bank has enjoyed the public trust since its earliest days. Deposits grow rapidly, reaching 1 million Luxembourg francs in 1869.
1900 - 1906

Expansion of the services provided by the Savings Bank

Before 1900, the institution’s sole mission was the proper management of savings accounts entrusted to it. With the creation of the Mortgage Bank ('Crédit Foncier') in 1900 and the Affordable Housing Department ('Service des Habitations à Bon Marché') in 1906, the Savings Bank is able to share the benefits of this capital directly with the country, thus contributing to the Grand Duchy’s prosperity.
1909 - 1913

Construction of the main building of the Savings Bank

Following construction of the Adolphe Bridge from 1900 to 1903, the Luxembourg government asks the Savings Bank and the Railway Company ('Chemins de fer d’Alsace et de Lorraine') to construct a monumental building at the head of Avenue de la Liberté. Thus, the current 'Hôtel de la Caisse d’Épargne' is built between 1909 and 1913 in a Renaissance style, designed by Luxembourg architect Jean-Pierre Koenig.
1914 - 1918

World War I

World War I begins in 1914, leading to four years of German occupation. The economy slows drastically, giving way to slowly rising inflation. Gold is abandoned and is replaced by paper currency. Luxembourg is cut off from all communications with neighbouring countries.
1916

100 million Luxembourg francs

Deposits reach 100 million Luxembourg francs.
1918

Libération

World War I comes to an end, and the German customs union 'Zoll- und Handelsverein' is revoked. German currency trades against Luxembourg treasury bills at a rate of 1.25 francs per mark. Due to the loss of value of German securities and debt along with Russian and Italian securities, the Savings Bank records a loss of nearly 20 million, which it fully recovered within the five following years.
1922

Belgium-Luxembourg Economic Union

The Grand Duchy signs the Belgian-Luxembourg Economic Union (BLEU) treaty and adopts the Belgian franc as the union’s currency. Both countries enjoy a rapid improvement in their economic situation. This union still exists to this day.
1926

Run sur la Caisse d’Épargne

The first devaluation of the Belgian franc leads to a run on the Savings Bank. This shock likely resulted from public panic, due to the franc’s sudden loss of value.
1928

The Luxembourg Stock Exchange

The Luxembourg Stock Exchange is founded on 5 April 1928; the Savings Bank is a founding member and principal shareholder. Today, the’ Banque et Caisse d’Épargne de l’État, Luxembourg’ (actual Savings Bank) remains the largest shareholder of the Luxembourg Stock Exchange.
1929

The Wall Street Crash

The 1929 Wall Street Crash leads to a massive worldwide banking and currency crisis.
1929

Social Housing Department

In 1929, the Savings Bank establishes a new Social Housing Department, created under the Act of 26 April 1929. This new department is placed under government authority and administered by the Savings Bank on behalf of and guaranteed by the State. It grants low-interest loans to build affordable housing and provides the less fortunate with access to the property market.
1930

Autonomy for the Caisse d’Épargne

Passage of the Act of 16 June 1930, guaranteeing the almost total autonomy of decisions taken by the Board of Directors of the Savings Bank.
1937

Personal lending

The Grand-Ducal Decree of 27 May 1937 authorises the Savings Bank to grant short-term loans, credit facilities and overdrafts to private individuals secured by collateral.
1940

German invasion

Following the German invasion on 10 May 1940, the Luxembourg and Belgian francs are abolished and replaced by the Reichsmark as legal tender. The Savings Bank and the Mortgage Bank are abolished and replaced by four regional savings banks organised on the German model ('Stadtsparkasse' Luxemburg, 'Kreissparkassen Diekirch', Esch and Grevenmacher).
1940 - 1945

World War II

The new Savings banks are placed under German management. Despite their intense activity and positive balance sheets – primarily due to coercive measures against the private banking sector – the new management recognises that Luxembourg residents are reluctant to deal with them. In fact, during the occupation, no transactions are recorded in 85% of the former Savings Bank accounts.
1944

Liberation period

During the liberation of the Grand Duchy (1944-1945), General Omar Bradley, commander-in-chief of the 12th US Army Group, establishes his headquarters at 2 Place de Metz (one of BCEE’s current buildings).
1944

Emergence of a full service bank

To re-establish the Savings Bank and restore its business as quickly as possible, the Grand Ducal Decree of 25 October 1944 authorises the Savings Bank to expand its activities to cover all transactions performed under German savings bank regulations. The Savings Bank thus becomes a de facto full service bank. The Savings Bank’s new banking activities included securities-related banking, cash receipts and bill finance as well ass and currency exchange transactions.
1947

Benelux Treaty

Luxembourg, Belgium and the Netherlands ratify the Benelux Treaty.
1950 - 1955

Growth of the bank

By the end of 1950, the bank’s balance sheet exceeds 4 billion Luxembourg francs. The growth of the Savings Bank during this time closely tracks the national economy. Both the balance sheet figures and profits show steady growth, allowing the institution to gradually re-establish a reserve fund consistent with its increasing financial responsibilities.
1959

The first investment fund

The Savings Bank is involved in creating the first Luxembourg investment fund, EURUNION, in 1959.
1961

Educational savings

The concept of educational savings has existed since the 19th century. However, this principle has only been accepted by the population during the post-war period. The Savings Bank revived educational savings in 1961, making it especially attractive by providing first year schoolchildren with a free savings account containing 100 Luxembourg francs, along with a porcelain savings box, available during the educational savings festival. This tradition is still maintained today.
1961 - 1966

New savings methods

During this time, savings passbooks are promoted in a variety of ways, as for example loyalty bonuses, construction savings, educational savings plans and savings programmes for future acquirements.
1972

State Bank

The ministerial decree of 12 April 1972 authorises the Savings Bank to add the words 'State Bank' to its name.
1983

Rule of common law

The law of 14 June 1983 subjects the Savings Bank to the rule of common law, while specifying the fixing and allocation of the institution’s profit allocation.
1987

The Caisse d’Épargne establishes its headquarters at 2 Place de Metz

After the Luxembourg National Railways (CFL), the European Coal and Steel Community (ECSC), and the European Investment Bank (EIB) established their offices at 2 Place de Metz, the Savings Bank follows suit in 1987, relocating to this historic landmark.
1988

Construction of the ‘Rousegäertchen’-Building

The Construction of the 'Rousegäertchen'-building takes place from 1988 to 1994. The Savings Bank ensures that this new building was seamlessly integrated into the Bourbon Plateau, safeguarding the area’s traditional architectural style.
1989

A new name : 'BCEE'

Under the law of 24 March 1989 reforming the Bank’s articles of association and internal organization, its current name - Banque et Caisse de l’Épargne, Luxembourg (BCEE) – is adopted. This name reflects the bank’s commercial direction and its status of universal bank.
1991

Opening of the tunnel

The construction of a tunnel between 1 and 2 Place de Metz and the Rousegäertchen building, 15 metres below ground, begins in 1987. The tunnel gradually enters service from March 1991 on.
1994

The BCEE’s ratings

The BCEE is first rated by STANDARD & POOR’S et MOODY’S in 1994. Its excellent ratings at that time (AA+ by S&P and Aa1 by MOODY’S) placed the BCEE among the world’s highest rated banks.
1994

The Art Gallery 'Am Tunnel'

The 'Am Tunnel' Contemporary Art Gallery, located in the tunnel beneath the Bank, first opens in 1994. Since then, the Gallery has displayed works by many world-renowned artists.
1995

The Bank Museum

The former teller hall at 1 Place de Metz is closed in 1987, leading to the 1995 opening of the Bank Museum with didactic character, which informs visitors about the banking profession, the history of the Luxembourg financial center and the history of the BCEE.
1996

The first steps toward electronic banking

In 1996, BCEE launches its website, www.bcee.lu, along with S-Line, the Bank’s first off-line PC-Banking product, which enables customers to carry out transactions at home using a personal computer.
1997

Over 1,000 billion Luxembourg francs

The balance sheet surpasses 1,000 billion Luxembourg francs for the first time.
1999

Launch of S-net

Launch of S-net, the BCEE’s Internet-Banking service. Its success among customers exceeded all of the Bank’s expectations.
2000

The Edward Steichen Space

The 'Am Tunnel' Contemporary Art Gallery opens its new Edward Steichen Space, a permanent exhibition dedicated to the legendary work of this internationally renowned photographer who was born in Luxembourg. 2002.
2002

Introduction of the Euro

The Euro is introduced in Luxembourg on 1 January 2002. The BCEE was fully prepared for this event, rightly declaring in the press: "The switch to the Euro has been a success!"
2006

Independent Management Company

In 2006, the BCEE creates its independent management company Lux Investment Advisors (LIA), which name is changed to 'BCEE - Asset Management' in 2011.
2007

Start of the financial crisis

In September 2007, the financial crisis is triggered when Lehman Brothers, a U.S. bank, announces its closure. Other institutions quickly follow suit, leading to a collapse of the local banking system and a subsequent international economic crisis. In the same year, the BCEE experiences a new influx, due to investor perception of instability at competitor banks within the city’s financial centre.
2014

European supervision

Since November 2014, the BCEE has fallen under the European Central Bank’s direct banking supervision, following implementation of the Single Supervisory Mechanism (SSM), whose main objectives are to safeguard and strengthen the European banking system and to reinforce integration and financial stability in Europe.
2015

Acquisition of the ARBED building

In 2015, the BCEE acquires the former ARBED building, located on the Bourbon Plateau. This acquisition allows the Bank to expand its business but, most importantly, it enriches the Bank’s architectural heritage.
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