WIR Economic Circle Cooperative

= successfull Swiss local currency for business to business transactions based on mutual credit

URL = http://www.wir.ch/

"the WIR credit clearing association that has been operating in Switzerland for more than 70 years. Now called the WIR Bank and providing conventional banking services, WIR is an important case for monetary reformers and free exchange advocates to study. While there may yet be some deficiencies in its operating policies, WIR has proven over a long period of time the effectiveness of direct clearing of credits between buyers and sellers as an alternative to conventional bank-created debt-money." (Thomas Greco [1])

Description

WIR - Current Operational Realities: A Report by Susan Witt, E. F. Schumacher Society, October 2008:

At the moment I’m visiting in Switzerland and wanted to report to you on use of WIR, a regional currency in Switzerland separate from the Swiss Franc. A little background first. WIR was started in 1930s as a means for Swiss businesses to trade with each other. It was launched at a time when the economy was in crisis and was seen as facilitating business in absence of credit in francs.

Participating businesses are listed in a glossy catalogue. Exchange is done through a checking account, or through a WIR credit card. There is no paper currency.

Every time a business receives a payment in WIR, the check or credit card receipt is sent in to the WIR bank, physically sent in, where the account of the business is credited, and a fee is taken by the bank. This means all trading in WIR must have a WIR bank account.

I learned by asking at Basel Rotary meetings that some businesses sidestep the fee by giving checks without a designated name and these are passed on and on. It also means that businesses without a WIR account are trading in WIR. A blackmarket if you will. This, of course makes the WIR bank folks livid when I bring it up, and of course reduces the income to the bank that pays for the program.

Nevertheless most transactions are done in an open “legitimate” way and by 2006 when I interviewed one of the bank’s officers, circulation had grown to 1.6 billion. A wide range of businesses participate including and especially all of the trades. I attended one of the WIR trade shows in 2007 in Zurich. It took four floors of a huge exhibit building — also used for rock concerts. Folks that I interviewed said they are making contacts at the trade fair that keep their sales team busy the rest of the year.

In this way WIR is widely credited with keeping Swiss economy strong.

The WIR bank lets its members make deposits both in Swiss Francs and WIR and likewise payments can be designated in both amounts. So when paying with a WIR credit card, you can write on the slip 75 WIR, 25chf. This was a relatively new addition allowing for convenience and flexibility.

WIR has historically not involved individual consumers, but rather is a business to business program. However several years ago the bank opened up deposit accounts to the general public. The incentive was that the WIR bank paid higher interest rates on its Swiss Franc deposits then other banks. It could do this because it offers very low cost loans to its members in WIR, but then gives them access to lower cost Swiss Franc loans if they take the first part in WIR.

The bank then encourages its non-business depositors to move some of their Swiss Francs into a WIR account. That means that consumers then have the possibility of trading in WIR. In the little town of Rheinfelden where I’m staying, there are “We Accept WIR” stickers in shoe store windows, book stores, pharmacies, to name a few — providing an outlet for WIR trade." (http://beyondmoney.wordpress.com/research-and-reviews/wir-current-operational-realities/)

More Information

1. report by Susan Witt on the WIR credit clearing association, http://beyondmoney.wordpress.com/research-and-reviews/wir-current-operational-realities/
2. report by Erick B. Hansch, http://www.smallisbeautiful.org/local_currencies/wir.hansch.html
3. Video presentation of the alternative Swiss bank, http://www.youtube.com/watch?v=uQehEGGwy0Q
4. Book review: WIR and the Swiss National Economy‎
5. 60 Years WIR Business Circle Cooperative - Origins and Ideology*

Translation, by Frederika Almstedt with assistance from Thomas Greco, of an article which appeared in WIR Magazin, September 1994.

1. Alternatives to Globalization: Cooperative Principle and Complementary Currency