Anniversary book

The book “Kulturgeschichte des Geldflusses“ (Money Flow – a Cultural History) has been at the anniversary of 15 years SIC and 25 years DTA/LSV in 2003. The book is freely available for download.


E-book only in German

Synopsis by Prof. Dr. Hans Geiger

Payment traffic, as such, traditionally was never held in very high esteem, neither by the banking industry nor by science – an injustice, as it turns out. For several years now, a shift in thinking has been occurring. The linguistic root of the modern word "finance" is found in the Latin "finis" (the end) and reminds us that a market transaction was only considered complete with settlement of the final payment. As far back as 1776, Adam Smith wrote in his work about the prosperity-inducing effect of the division of labor. He stated that a divided-labor economy could only work if its products could be traded at market. Money – currency – and payment traffic therefore form the very basis for the functioning of the pricing mechanism, and thereby prosperity, in a market economy. As it turns out, it was indeed payment traffic, and not the credit business, standing beside the cradle of European pre-industrial banking.

Captivating and entertaining

SIX Interbank Clearing Ltd., which operates the payment traffic system SIC on behalf of the Swiss National Bank, published a book on the occasion of its 15th anniversary. This book focuses on the one hand on the economical, political and cultural roots of modern payment traffic systems, and on the other illustrates the emergence of those systems. Over approximately 140 pages, the two authors, Fritz Klein and Guido Palazzo, have succeeded in portraying the world of payment traffic and money from its origins to electronic funds in a captivating and entertaining fashion. In the first four chapters, and in three phases, this well-structured book describes the emergence of the market economic order, banks, and the development of payment traffic systems. The fifth chapter is dedicated to the future of money and payment traffic. The authors placed great emphasis on illustrating the developments in Switzerland, and they examined the causes for the tremendous significance of postal services in Switzerland’s payment traffic.

More than history

This practical volume doesn’t just limit itself to telling the description of payment traffic history, institutions and products; it also addresses basic questions about trade and payment. Included are, among other things, comments about the risks in payment traffic and the necessity for trust in individuals, organizations and systems during the processing of market transactions. In conjunction with the anniversary of the SIC system, the creation of this cornerstone of the Swiss financial market infrastructure during the years 1980 until 1987 is of special interest. Back then, the Swiss banking industry broke away from the technological center field with a gigantic and courageous step and placed itself at the very forefront of the development. Today, the infrastructure components of the Swiss Value Chain are among the most significant competitive advantages of the Swiss financial industry. On an average day, SIC processes payments with a value that corresponds to more than one third of the Swiss annual gross national product and is clearly a sign of the significance of the financial sector for the Swiss economy.

Influence of information and communication technology

Chapters four and five contain a concentrated and very topical overview of the most important payment traffic systems and products. In addition to the Swiss systems, the book also introduces us to international systems like TARGET and Continuous Linked Settlement System (CLS). These illustrations clearly demonstrate the tremendous influence modern information and communication technologies have on trade and settlement. And those new technologies enable the application on a global level of the oldest of the security elements in the trade business: processing step by step. This closes the circle from the account of the historical sources of the market economy to the future of digital currency.

The well-written book is equally accessible to lay people with its engaging style and its appealing illustrations. It is rounded off with an addendum providing interesting statistics demonstrating the rise and decline of important modern means of payment in Switzerland.