Guía Académica

GUÍA ACADÉMICA

1 Rotschild Family 3 CONTENTS

1. Presentation letters

2. Committee introduction

a. Brief description of the committee: What it consists of, its scope and objectives

3. Context

a. Banking Law Context b. UK Banking Context c. french Banking Context

4. Historical context

a. Mayer Rothschild b. The expansion and control of the Rothschilds c. Nathan Rothschild d. Family Tree e. The Rothschild family in the 21st Century f. Present: initial date, current situation, among others

5. Committee objectives

a. Economic Objectives b. Political Objectives c. Social Objectives d. Challenges e. Threats

6. Special procedure

7. Conclusions

8. References

4 Presentation Letters A. LETTER FROM THE SECRETARY AND UNDERSECRETARY GENERAL OF MONUA 2020

Delegates,

From the Ofﬁce of the Secretary-General, it is with great pleasure that we welcome you to the ninth version of the Modelo de Naciones Unidas de la Universidad de los Andes.

My name is Jordi Enrique Buitrago Soetendal. I am a fourth- year Law student with a minor in International Studies at the Universidad de los Andes. For MONUA 2020, I have the honour of accomplishing the biggest dream of my MUN career: serving as Secretary-General of MONUA. I have been participating in MUN conferences for the last eight years, and MONUA 2020 is with no doubt the most complex and exciting challenge I have faced during all these years. Besides MUN, I am passionate about my career, particularly for Criminal Law, as well as football and literature.

On my behalf, I am Santiago Paz Ramos, a fourth-year Economics major with minors in International Relations and Law. In this edition, I have the huge honor to continue building dreams by your side, by serving as Undersecretary-General for MONUA 2020. I have been participating in these conferences for the past 7 years now, and each day I learn something new, meet one-of-a-kind people, and surpass the barriers of what I think I am capable of. Personally, aside from being deeply passionate about these conferences, I am profoundly interested in Political Economy, Macroeconometrics and music.

5 We aspire to exceed the expectations you have from us in this edition of MONUA, by managing to build up an experience that is equally both welcoming and challenging, so as to encourage you to leave your comfort zone and challenge the boundaries of the self. For all other matters, we remain at your entire disposition, and we warmly welcome you beforehand to MONUA 2020.

Best regards,

Jordi Enrique Buitrago Soetendal - Secretary-General for MONUA 2020

Santiago Paz Ramos - Undersecretary-General for MONUA 2020

6 PRESENTATION LETTERS B. LETTER FROM THE UNDERSECRETARY GENERAL FOR CRISIS COMMITTEES OF MONUA 2020

“Nothing is written.” – T.E. Lawrence

Dear delegates,

It is a pleasure for me to welcome you to MONUA 2020, and in particular to the Undersecretariat for Crisis Committees. My name is Juan Sebastián Andrade, I am a Microbiologist and Master of Science in Computational Biology from Universi- dad de los Andes. I have partaken in MUNs between 2008 and 2012 (including the ﬁrst MONUA, in 2012), and from 2017 until now. It was in fact in 2017 that I ﬁrst discovered crisis committees, and they have been my niche in the MUN world ever since. I have been a member of the Onuandes Crisis Team for three years, participating twice in the McGill University MUN, (McMUN), in 2018 and 2019. In 2020 I’ll have the pleasure of testing my skills at the University of Chicago MUN, CHOMUN.

Crisis committees entice us to engage in dynamic debate and teamwork, and above all to imagine and dream. They are about taking the reins of history, be it the past, present, or future, and rewrite it as we see ﬁt. They are about swimming in strange waters, about allowing ourselves to be allured by situations and stories that we had never heard before, or just barely. They are about challenging ourselves, to be more rig- orous in our preparation and ﬂawless in our negotiation and directives, to be better people and better delegates. However, and much more importantly, they are about meeting those extraordinary people who share the love, abilities, and wacki-

7 ness that all crisis delegates have. It is precisely due to my affection for those people, my superiors, my fellow USGs, and my staff, that I am addressing you as Undersecretary today.

We expect that you exploit your incredible capabilities, and that, through your knowledge, you dare to be original and creative. Our committee offer has something for everyone, be it reenacting the conﬂict between the First and Second World in the Vietnam War, controlling the globe through the political, economic, or social power of the Rothschild dynasty, or testing yourselves in an Ad-Hoc committee unlike anything else you have seen in the past.

The best piece of advice I can give you prior to the start of your committees is to remember why you love MUNs. Even though war, death, and fear are always present in a crisis committee, love, the desire to have fun, and the resilience to keep delegating are what get us out of those tight spots.

I wish you the best of luck in your committees, and I hope you enjoy them as much as we enjoyed ourselves making them for you. Welcome to MONUA 2020!

Yours truly,

Juan Sebastián Andrade Martínez Microbiologist, Master of Science in Computational Biology [email protected]

8 PRESENTATION LETTERS C. LETTER FROM THE CRISIS DIRECTOR

Dear delegates,

Welcome to the 9th version of MONUA and the Rothschild Family committee. My name is Alan David Gómez, I am an eight-semester Economics student minoring in Business Administration at Universidad de los Andes. For this version of the conference, I will be your crisis director. Since I became part of the MUN world, I have been passionate for crisis committees. Quite frankly, I have never partaken as dais or delegate in any traditional committee. In my opinion, crisis committees are the most stressful and challenging experiences in conferences; hence, they are the most amusing.

This committee has a special place in my MUN career since it touches upon my favorite topic: the political economy of power relations within society, and how the latter works. You will experience how the most powerful men and women in the world protect their interests and how they control their assets to overcome all hurdles and hazards in their way. However, this experience also will help you to ponder on privilege and its impact on political and economic inequality, as well as to confront the institutional structure and the ominous consequences of power addiction. Without further ado, allow me to introduce my crisis staff.

Receive a very warm welcome to MONUA 2020 and the Rothschild Family committee. My name is Camila González Martínez, I am currently majoring in Law at Universidad del

9 Rosario. On this occasion, I will be your crisis room deputy director. I have no doubt that I will do my very best work to give you, alongside with Alan and Juan Felipe, one of your best experiences in a crisis committee. Best of luck, and please, enjoy.

There is no greater satisfaction in life than completing a challenge with any degree of success. My name is Juan Felipe Zuleta Pulido and I will be working as crisis agent. I am currently majoring in Business Administration with a minor in Chinese Language and Culture at Universidad de los Andes. Personally, I’ve been a part of different MUN conferences on and off since I was in high school. I especially enjoy crisis committees since they provide the right blend of freedom and rigorousness for well-rounded delegates. I sincerely look forward to meeting all of you and challenging you from behind the scenes.

Without anything else to add, I invite you to prepare yourselves for a unique and thrilling experience. Do not hesitate to contact me if you have any doubt.

Sincerely yours, Alan D. Gómez Crisis Director [email protected]

10 PRESENTATION LETTERS D. LETTER FROM THE DAIS

“The past cannot be changed. The future is yet in your power.” - Mary Pickford

Dear delegates,

I truly hope that you are all ready to face the challenges this committee is going to bring. The Rothschilds are not only a powerful family in economic aspects, but in a lot of other areas, ranging from politics to conservation. In light of their power, they have had their fair share of conspiracy theories.

My name is Carolina Lenhardt Guaqueta, a fourth-semester student of Marketing and International Logistics Management, and third-semester student of Industrial Engineering from Universidad de la Sabana. I love everything that involves creativity, which is the reason why crisis committees are one of my passions. For this committee, I invite you to discover new sources of power and to use your imagination, always within the context of the committee. Also, it is important to remember that although this is a competition, respect towards other delegates should always be the priority. Without anything else to add, I will leave a small question as a motivation for MONUA 2020: What would you do if all of the world’s power was in your hands?

My name is Ana María Cárdenas Nocua, I am a second- semester Mathematics student at Universidad de los Andes. I started attending MUNs when I was in school, but I fell in love

11 with crisis committees three years ago. On this occasion, I have the honour to be your dais. I really appreciate teamwork, crazy ideas, and recursiveness. I think a crisis committee is about being ready to face new challenges, so I expect that you will be prepared for everything. I hope you enjoy this committee and welcome to one of the best experiences of your life. Yours truly,

Carolina Lenhardt Guaqueta [email protected]

Ana María Cárdenas Nocua [email protected]

12 PRESENTATION LETTERS E. LETTER FROM THE CHARACTERS

March 19th, 2020 Berkshire, United Kingdom

Dear Family,

I remember that when I was just a kid, I used to play with a ball in the garden of our house in Berkshire. Victor Rothschild, 3rd Baron Rothschild gave me a name I must honour, they call me Lord Rothschild and I work as a banker and as the honorary president of the Institute for Jewish Policy Research. He told me one day that I am part of this family, and that even though I am on the opposite side of the world, I will always be a Rothschild. My mother Barbara taught me to follow my dreams. I am 83 years old now, and I must take care of my family just like Nathan Mayer Rothschild. But the future of the family is not just in my hands, that is why you are here today. We will work together to ensure the stability of our business in the future. The family is the only thing you can trust, and we are together regardless of what happens. We have more than economic power, our name is a synonym of authority in modern society, and we have inﬂuence in the arts, in science, sports, technology, and literature. Use all the resources you have, continue the rise of our family, maintain our supremacy in every aspect and keep the creativity that characterizes us.

Yours truly,

Nathaniel Charles Jacob Rothschild, 4th Baron Rothschild.

13 March 19th, 2020 New York City, USA

Chère famille,

I’ll start this letter by telling you a small story.

It all started when I was born, 1942, New York. My parents, Guy Alphonse Paul de Rothschild and Alix Hermine Jeanette Schey von Koromla, decided to leave France, for safety, during the Second World War. Later on, my mother took the decision to stay with me in New York while my father decided to go back to France to join the Free French Forces. When the war ended, the whole family went back to France, where I ﬁnished my studies at the Institut d’Études Politiques de Paris, 1966. I started my career at the Société Minière et Métallurgique de Peñarroya, one of the international mining business of the family and then started to train for operating at De Rothschild Frères bank. Still, it was not possible thanks to a new French government reform in 1967, which forced the Rothschild Frères bank to turn into the “Banque Rothschild”, a company burdened by liabilities.

Note then, that in this day and age neither wealth nor our name alone renders us invulnerable to the whims of time. It has been a long road, and the vicissitudes of this century and the last have not always been favourable for me or the family. Fortunately, in April 2018 I became Chairman of the

14 Supervisory Board of Rothschild & Co. Members, family… see how time has passed and how much every single being of this family has fought for taking our companies ahead?

It is 2020 and I am worried that one day this dynasty may get to its end, we have too many eyes on us and too many speculations about our work. Your job is to make sure that our business, as well as our family’s name, is kept safe. That is why you have been summoned to Berkshire. I know you will do your best.

À bientôt!

Baron David René James de Rothschild

15 2. Committee introduction

A. BRIEF DESCRIPTION OF THE COMMITTEE: WHAT IT CONSISTS OF, ITS SCOPE AND OBJECTIVES

The Rothschild family, one of the most famous banking dynasties of Europe, has a deep history behind it. Delegates must delve into the ﬁnancial and business world that involves the name of the Rothschild family while being able to develop their characters through any challenges, crises, and opportunities that appear in the committee.

The committee will take place in the year 2020, which means delegates must be informed about exchange rates, international ﬁnances rules, and how the world is currently going so that the committee can function in a harmonious way. The objective here is to keep the Rothschild fortune intact; a big challenge that will require a great deal of determination by the delegates.

In said context, we expect the following from all delegates partaking in the committee:

-. Humanism: No disrespectful actions towards other beings in the committee will be allowed. -. Realism: We expect delegates to truly embrace their characters and their duties in committee. Thus, delegates must put an emphasis on their character’s powers and opportunities on private directives. On the other hand, through public directives, they must work in order to leverage the power of the whole committee, so as to maintain it or increase it. -. A small sense of wackiness: Since this is a crisis committee, we expect that all delegates bring new and fresh ideas to the table on how to advance the interests of the family. In other words, each delegate must use their imagination to contrive new plans which are pertinent, given the context of the committee. -. Knowledge: Delegates will be evaluated on their research about the subject, as evidenced both by their plans and their interventions. We really expect that this aspect is highly looked into and that all delegates come truly prepared and informed.

Lastly, we hope all delegates arrive at MONUA 2020 with good attitude and are willing to give their best during the committee.

16 3. Context

A. BANKING LAW CONTEXT:

The word “bank” comes from an Old High German word meaning “bench”. Early bankers in Europe used benches as makeshift counters for banking transactions. Now, what does a bank do? For starters, banks look after your money: keeping small amounts of money in your pocket to pay for things makes sense. But holding larger amounts is risky as there is a chance that your money could get lost or stolen. Many banks today offer free safekeeping services, with no charge for using your current account. In return, they are able to use the money stored with them to earn a proﬁt, by lending it to other people. In other words, banks don’t just look after your money, they lend it. Banks provide loans for many things, whether you’re a family looking to buy a house or a business seeking to expand, hire personnel and grow. In this way, the ﬂow of lending can help the economy as a whole to thrive.

Banking law is something that has existed for years now, and it is instrumental in maintaining the order and balance of the economy throughout time, in avoiding the abuse of power and money from governments, and in bolstering economic growth. To assure that banking laws are complied with, a number of ﬁnancial entities have been established by different nations.

Currently, the Rothschild Family participates in the banking world through Rothschild & Co., a multinational investment bank and financial services company, and the flagship of the Rothschild banking group, which is controlled by the French and British branches of the Rothschild family. In fact, Rothschild & Co is the result of a merger of the banking firms of the French and British Houses of Rothschild, each with individual but intertwined histories. The banking activities of the enterprise covers the areas of investment banking, restructuring, corporate banking, private equity, asset management, and private banking. It is also known to serve as the advisor and lender to governments and major corporations. Rothschild’s financial advisory division is known to serve British nobility, including the British Royal Family. Former chairman Sir Evelyn Rothschild is the personal financial advisor of Queen Elizabeth II, and she knighted him in 1989 for his services to banking and finance.

17 The Compagnie du chemin de fer de Paris à Orléans was founded in 1838 as a railway company; after several takeovers and a merger with the Chemins de fer du Midi it had about 11,000 km (6,800 mi) of track, and was one of the major railway companies in France. In 1938, it was nationalised along with ﬁve other railway undertakings to form the national state railway company SNCF (Société nationale des chemins de fer français). After the Second World War, the French branch of the Rothschild family took over the remains of Paris Orléans and transformed it into a holding company for its banking activities and other corporate investments. These mainly included the Banque Rothschild (Bank), SGIM (property company), the SIACI (insurance), the Francarep (oil company) and the SGDBR (wineries), now Domaines Barons de Rothschild (DBR).

In light of the fact that the committee will be focused on the activities of the French and English branches of the Rotschilds, it is pertinent to review the Banking Context of both the UK and the French Republic.

B. UK BANKING CONTEXT:

The primary source of framework legislation governing the regulation of banking and ﬁnancial services in the UK is the Financial Services and Markets (FSMA). While the current UK regulatory framework derives mainly from the FSMA and related implemented legislation and rules, it is also substantially inﬂuenced by various European laws that set minimum requirements for the regulation of banks and banking services in the European Economic Area.

The architecture of the UK regulatory framework is, however, expected to change signiﬁcantly over the next few years. In June 2016, the United Kingdom electorate voted in favour of leaving the European Union, which is expected to have an impact on the legal and regulatory framework governing the regulation of banks in the future. The regulation of banks in the UK is undertaken by three main regulators, the:

-. Bank of England: has two core purposes, ensuring monetary and ﬁnancial stability, and the following key roles in banking regulation: -. Prudential Regulation Authority (PRA), a division of the Bank of England. -. Financial Conduct Authority (FCA).

18 The Prudential Regulation Authority and the Financial Conduct Authority are the lead bank regulators. The Bank of England is the resolution authority, with primary responsibility for regulatory intervention and exercise of resolution powers in relation to banks that are failing or likely to fail.

For banks, the PRA is the prudential regulator and the FCA the conduct regulator. The PRA and FCA together replaced the Financial Services Authority (FSA), the UK predecessor regulator.

Other authorities are:

Her Majesty’s Treasury: The Treasury also influences bank regulation. While the Bank of England retains responsibility for monetary policy and financial stability, the Treasury is the governmental department responsible for economic and financial policy.

The Treasury is in charge of the overall institutional structure of banking regulation and legislation (including the negotiation of EU legislation), reporting to the UK parliament on serious problems in the ﬁnancial system and measures used to resolve them, and monitoring banking sector resilience to operational disruption.

The Bank Charter Act 1844, sometimes referred to as the Peel Banking Act of 1844, is an Act of the Parliament of the United Kingdom, passed under the government of Robert Peel, which restricted the powers of British banks and gave exclusive note-issuing powers to the central Bank of England. Until the mid-nineteenth century, commercial banks in Britain and Ireland were able to issue their own banknotes, and notes issued by provincial banking companies were commonly in circulation.

Under the 1844 Act, bullionism, the monetary policy of mercantilism, which called for national regulation of transactions in foreign exchange and in precious metals in order to maintain a “favourable balance” in the home country; was institutionalized in Britain creating a ratio between the gold reserves held by the Bank of England and the notes that the Bank could issue, this given the fact that the economy and banks used to spend on gold for their sustenance, and limited the issuance of non- gold-backed Bank of England notes to up to £14 million. The Act also

19 placed strict curbs on the issuance of notes by the country banks, barring any new “banks of issue” in England and Wales and thus beginning the process of centralizing banknote issuance (Tonilo & White, 2015).

The Act was a victory for the British Currency School, who argued that the issue of new banknotes was a major cause of price inflation. The British Currency School was a group of British economists, active in the 1840s and 1850s, who argued that the excessive issuing of banknotes was a major cause of price inflation. They believed that, in order to restrict circulation, issuers of new banknotes should be required to hold an equivalent value of gold as a reserve. This concept was also known as convertibility and the currency principle. They argued that prices were mostly based on the quantity of currency in circulation, although proponents did acknowledge that prices were also affected by deposits. Therefore, by controlling prices, banks could limit the outflow of gold.

C. FRENCH BANKING CONTEXT:

The banking sector in France is characterized by its highly integrated nature – the six leading French banking groups in terms of net banking income for 2017 were BNP Paribas, BPCE, Groupe Crédit Agricole, Société Générale, La Banque Postale and Groupe Crédit Mutuel.

As of today, 12 French banking groups are signiﬁcant, representing 33 percent of the total banking assets (goods, actives) held by major credit institutions, and supervised by the European Central Bank (ECB), pursuant of Regulation 1024/2013.

Another key feature of the French banking sector is the presence of cooperative and mutual benefit banking groups. Three of the five largest banking groups in France are mutual benefit banking groups. The main characteristic of these groups is their inverted pyramid structure. The groups are held by cooperative banks, which are in turn owned by their cooperative member-shareholders. The banking industry is one of the main private employers in France.

Since 2014, the most signiﬁcant event with respect to the French banking system has been the implementation of a harmonized European regulatory framework.

20 This includes: a. A Single Supervisory Mechanism (SSM); b. A Single Resolution Mechanism (SRM); c. The Bank Recovery and Resolution Directive (Directive 2014/59/EU) (BRRD); d. The adaptation of the national regulation framework thereto.

Five signiﬁcant steps towards European harmonization have been taken since 2011: a. On January 1st, 2011, the European Banking Authority (EBA) was created; b. On June 26th, 2013, the EU adopted a legislative package to implement the Basel III Accords into the EU prudential framework, and to strengthen the regulation and supervision of the banking sector in Europe by introducing harmonized rules (the CRD IV Package); c. On October 29th, 2013, the EU adopted the creation of the SSM to confer speciﬁc supervision tasks on the ECB; d. On July 30th, 2014, the EU enacted the creation of a bank SRM, elements of which entered into force on August 19th, 2014; and e. On May 15th, 2014, the European Union enacted the BRRD, which was amended in regard to the ranking of unsecured debt instruments in an insolvency hierarchy by a directive dated December 12th, 2017. The bank recovery and resolution directive (BRRD) was adopted in the spring of 2014 to provide authorities with: -. Comprehensive and effective arrangements to deal with failing banks at the national level. -. Cooperation arrangements to tackle cross-border banking failures.

The directive requires banks to prepare recovery plans to overcome ﬁnancial distress. It also grants national authorities powers to ensure an orderly resolution of failing banks with minimal costs for taxpayers.

Other than EU regulations of direct application, the statutory framework applicable to the regulation of banking activities is provided by the French Monetary and Financial Code, and by speciﬁc decrees and orders. The power to regulate the banking and ﬁnancial sector is now shared between the European legislature and the French Minister of Economy and Finance, assisted by a consultative authority, the Advisory Committee on Financial Legislation and Regulation.

21 4. Historical Context

The Rothschilds are a Jewish family who originated in Germany, better known for being one of the most famous banking dynasties of Europe given its inﬂuences at the economic and, partially, political aspect of European history (Bouvier, 2019).

A prominent family that established banks and finance houses across Europe by the XVIII century, they were pioneers in providing capital for different ventures and financing projects of infrastructure. They are responsible for the modern functioning of the international world of finance (Financial-lib.com, 2019).

A. MAYER ROTHSCHILD

It all started with their founder: Mayer Rothschild (originally called Mayer Amschel Bauer), born in 1744 in Frankfurt. For being Jewish, he was forced to live in small neighborhoods away from Christians. He was one of the eight children born from Amschel Moses Rothschild and Schönche Rothschild. His father, Amschel Moses Rothschild, was an exchange dealer and supplier of collectible coins for the Prince of Hesse (The Rothschild Archive, n.d.).

At the age of twelve, Mayer became an orphan. When he turned thirteen he decided to move to Hannover, Germany, with the purpose of learning how banking companies worked at the time. During this spell, Mayer was able to evaluate all the pros and cons of the banking sector and the external trade. Later, when he turned 19, Mayer decided to go back to his hometown (Frankfurt) and joined his brother to keep the commodities and businesses his father had started (including the sale of rare coins to Prince Wilhelm IX). Thanks to that, in 1769, Mayer was already working with other baking services for the crown and nobles, and eventually received the title of Crown Agent (Financial-lib.com, 2019).

22 In 1770 Mayer Rothschild married Gutle Schnaper, with whom he had his ﬁrst of ten children in 1773.

B. THE EXPANSION AND CONTROL OF THE ROTHSCHILDS

The banking Empire of the Rothschilds was extremely important during the French Revolution. During the War of the Second Coalition (1798- 1802), the Austrian government contacted the Rothschilds asking them to provide goods such as wheat, uniforms, horses, and equipment. At the time, Mayer sent all of his ﬁve living children to different cities in Europe (Frankfurt, London, Paris, Vienna, and Naples) with the purpose of having each one of them open a Banking commerce point, which they did in the year 1800. Due to Mayer’s children being spread in Europe, theirs was considered the ﬁrst International Bank (Reynard, n.d.).

The opportunity to provide funds to governments in order to ﬁnance war efforts, while being a risky enterprise, greatly increased the position, power and wealth of the family. Before dying in 1812, Mayer Rothschild set up rules regarding how to conduct the family business and how his successors should administer his ﬁnancing empire. He wanted to keep the fortune for the family, generating marriages between relatives (cousins). According to the article “Go ahead, kiss your cousin” from the magazine Discover , Mayer Rothschild basically organized his ideas in such a way that his descendants were forced to follow them thoroughly (Conniff, 2003).

His will was to bar female descendants from receiving any inheritance. Due to this, Rothschild women had low opportunities for ﬁnding a good marriage partner of the same religion and socioeconomic level (except for other Rothschilds). These marriages kept the family together. Four of Mayer’s granddaughters married their grandsons, and one married her uncle.

For two points of view on the ascent of the Rothschilds, you can take a look at these two movies (be aware of historical inaccuracies though!):

-. Die Rothschild (The Rothschild’s Shares in Waterloo), which presents how the Rothschild are portrayed at the Napoleonic War (in a negative way).

23 -. The House of Rothschild, which basically explains the story of the rise of the ﬁnancial empire of the Rothschild Family.

C. NATHAN ROTHSCHILD

Nathan Rothschild, born in 1777, is known for being the main responsible for the development and evolution of his family’s business in the 1800s.

After Mayer’s descendants spread throughout Europe, Nathan Rothschild was the ﬁrst of ﬁve siblings to observe that there was an opportunity for an expansion in the market, and in the year of 1789 decided to establish himself in England. By marrying Hannah Barent-Cohen, in 1806, Nathan was able to forward his business standing: thanks to his wife’s family name he was able to increase his range of business contacts, something which would have taken years to achieve by himself (basically, Hanna introduced Nathan to a wide network of Jewish economic contacts). As the years went by, he came to be considered a respectful man in Manchester and a man to be feared amongst the Rothschilds (Rothschild Family, 2009).

Due to his new economic contacts, Nathan started to have a poor bond and communication with his family business in the continent. In 1809, that attitude left Mayer Rothschild with no other option than to threaten his own son: unless he (Nathan) provided reports of his transactions (from London and Manchester) to his father’s account, he would have to break all business dealings he had with the family (Roberts, 2006).

Nathan’s expertise in trading and scrounging money through the Napoleonic war was what made him acquire his fortune. Nathan basically took advantage of the fact that non Napoleonic governments entered into bankruptcy (especially the British one), making blind-eyed (hidden) transactions, which were deliberate to authorities, though it was illegal and risky. His father helped him due to how lucrative the market was turning. Contacts at the time for pursuing this kind of actions were not an issue for them. For instance, the British Navy was one of their collaborators, shipping a wide amount of Rothschild money (Roberts, 2006).

In July 1815, a courier who used to work for the Rothschilds informed the English Government that apparently Napoleon had been defeated at

24 the Battle of Waterloo (Nathan Rothschild had a family’s agent at the place, who informed him about this situation). The English government disregarded the message because they considered it was a piece of fake information. At this time, the Rothschilds decided to take advantage of the “tragic future of England” (because people thought England had actually lost the war) and manipulate all England’s population to think that Napoleon had actually won the war and that the English Government’s role was useless (for economic purposes) in order to make better business deals. It all worked thanks to Nathan’s recognition and reputation of a respected and trustworthy investor (Financial-lib.com, 2019).

According to the Global Capital Magazine, the Rothschilds ended up having an income of £500,000 in the spring of 1815 (considered to be a large amount of money since the average annual income was around £50), which grew to £1 million by July 1816.

D. FAMILY TREE

Following, a simpliﬁed Family Tree of the Rothschild Family is provided (you can access it by scanning the QR code). The information was taken from The Rothschild Archive but the graph is original and speciﬁcally made for MONUA 2020.

E. THE ROTHSCHILD FAMILY IN THE 21ST CENTURY

As the years went by, the family’s power and fortune were shared between heirs and descendants. Nowadays the Rothschild family is known for not only dominating the ﬁnance market, but also others such as energy, charity work, mining, and real estate.

Some companies that they manage for each sector are:

-. Edmond - The Rothschild Group (which manages energy, environmental transition, real estate, wine production, and some banks). -. The Rothschild mining company.

25 -. The Rothschild Foundation (which manages charity endeavours). -. The Rothschild Group (Investment bank and ﬁnancial services company).

There are still some ﬁnancial corporations under the power of the Rothschilds in Europe, including N. M. Rothschild & Sons Ltd (UK), and The Group - Edmond (Switzerland). The family also owns factories in North and South America, Europe, Australia and South Africa (Financial- lib.com, 2019).

The Rothschild fortune is usually invested in privately held companies. The Rothschild Companies are still a success and a source of pride in the 21st century. Most members of the family are investors or workers of the companies owned by the family, which helps the Rothschilds keep their fortunes intact. Their success is based on a wide principle of cooperation created by the family and the practice of smart business (a business set with smart objectives, which means, before taking any action the business goal is analyzed to see if it is achievable) among them. This was reﬂected in their 2016 annual income, which was approximately 1.589 million euros. It is correct to say that Nathan’s actions and enterprises are the cornerstone of the family’s current fortune. The Rothschild family members kept investing, later on, in global businesses and currently contribute to academics, humanities and business projects (Financial- lib.com, 2019).

26 F. PRESENT: INITIAL DATE, CURRENT SITUATION, AMONG OTHERS

The committee will be held in the present, that means, within the political and economic situation of March 19th, 2020. The financial context is immersed in the consequences of the commercial war between the United States and China. The most important financial conglomerates and banks are trusting their funds to more secure countries and their risk aversion level is increasing, mostly in the short run. The FED has reduced its interest rates, and some experts have been saying that the crisis is averted (The New York Times, 2020). Several economists consider the level of investment inversely proportional to the interest rates, therefore these reductions are expected to dynamize the markets in periods of weak economic activity. Hence, if the FED reduction policies continue the markets are also expected to respond with massive dollar acquisition, in order to cover the risk, and capital outflows in the United States and the principal western economies (Campbell, 1995). Moreover, Europe has been profoundly affected by the recent political turnovers, especially by Brexit and migration flows. While the outlook is critical, wise decisions and good market readings could lead to highly profitable opportunities. Some experts consider expectations as the key of the puzzle, the markets are expected to react accordingly to the level of trust in economic and political institutions (Elsner y Schwardt, 2014). Therefore, reputation is important in order to maintain economic stability, if individuals and enterprises do not believe in the institutions it will be harder to avoid financial crisis and stagnant economies (Boomgaarden et al, 2011; Mankiw, 2006).

In social terms, the development of the modern world has come with dangerous threats to the status quo of traditional structures. People are more educated and therefore less receptive to domination and concentration of wealth and power (Baum and Lake, 2003; Alemán and Kim, 2015) Traditional families, powerful dynasties and rich people are increasingly regulated by democratic governments, pressed by their citizens. This is especially true for Western Europe, where redistribution of wealth is the common topic in public policy and direct taxes the most popular tool for policymakers. In this scenario, being part of the elite power structure is highly challenging. Hence, the Rothschilds need to maintain their political leverage and economic assets while they adapt themselves to a globalized Western Europe.

27 The power of the family has diminished in the last few years since some other actors and organizations have taken territories, sectors, and markets traditionally dominated by the Rothschilds. Their incomes have been reduced and they are no longer the richest family in Europe (Forbes, 2020). Some members of the press have deemed this as a non- return point in the downtrend of the family’s position. Furthermore, their political links are weaker than ever due to the fact that some traditional institutions have changed in favor of more egalitarian rules. Some branches of the family were stronger in the past, and a total of 4 existed (in Naples, Austria, France, and England). Nowadays just the French and English survive. In 2003, both branches decided to merge their most important companies into the Groupe Rothschild, a conglomerate that helped them reduce their market risk and to overcome control problems. This group manages approximately 180 Billion USD in capital investment and has multiple branch offices all over the world (Forbes, 2020). For the 2014-2015 period, the most profitable financial organization of the conglomerate, Rothschild & Co, had an income of 1.4 Billion USD and a net profit of 144 Million USD. Despite the rough time periods that the family has gone through recently, they still are one of the closest financial advisors of the British monarchy and the European elite. However, they will need stronger leadership with concrete actions if they want to survive their downturns.

5. Committee Objectives

A. ECONOMIC OBJECTIVES

In this committee, we want to focus on expanding the power of our family. In that sense, one of our main objectives will be to gain control of businesses outside of Europe. That is why we must defeat our rivals, especially the Rockefellers.

The Rockefeller name is so deeply entrenched in different spheres across the United States, that it is perhaps the largest business empire the world has ever known. From the oil industry and banking to Wall Street, higher education, medical research, and the arts, the Rockefellers have had an unquestionable impact on the spheres in which they worked (worldﬁnance.com, 2017).

B. POLITICAL OBJECTIVES

28 ‘Politics is not a game. It is an earnest business’ (Winston Churchill).

The Rothschild family and politics have been intertwined since Nathan Rothschild, who founded the English branch of the family business, ﬁnanced Britain’s war against Napoleon two centuries ago (independent. co.uk, 2008).

The future of our family is in our hands. Power is a gift and a tool, but it can destroy us as well as strengthen us. All of you have your friends and contacts around the world, use them wisely, take matters into your own hands and act now. Become those who direct the actions taken on our planet, but always remember to act with discretion. Whatever the cost, remember that family is family.

C. SOCIAL OBJECTIVES

Taking their name from the house of their 16th-century ancestors, “Zum roten Schild” (at the sign of the red shield) in Frankfurt’s Jewish ghetto, they became one of the wealthiest and most powerful 19th-century dynasties; bankers to monarchs and governments, builders of great houses and collectors of the ﬁnest art (Rothschild Foundation, n.d).

Our house is strong and has become even more so during the centuries. When people hear the word Rothschild, they recognize us as one of the richest families in the world, and yes, we are. But what we need is to be the face of power; people must respect and fear us.

D. CHALLENGES

The Rothschild family’s personal interests, like their businesses, have been pursued with attention to quality and a keen eye for innovation. Henri de Rothschild was an early motoring enthusiast. In England, his cousin Lionel was a talented horticulturist, creating a beautiful garden at Ebury House. The Sevres porcelain that many members of the family collected was perfectly suited to the style of Rothschild hospitality. Rothschild collections of art and objets d’art are amongst the finest ever assembled. Modern-day economic dynasties such as the Rothschilds face a number of different challenges. As a result, they often find themselves fighting wars on multiple fronts in order to secure their existence, influence, and

29 prestige. Securing their discreetly ominous spot at the top of the global economic hierarchy, the Rothschilds have branched out and diversiﬁed their business holdings in order to protect their accumulated capital.

In today’s world, families with fortunes and influence spanning several countries and centuries, such as the Rothschilds, have to face a never- ending wave of nouveau-riche entrepreneurs that pose a direct obstacle to their holdings across different sectors. The playing field has been somewhat leveled. Young figures like Mark Zuckerberg and Jeff Bezos have quickly risen to the very pinnacle of the world’s socio-economic pyramid, rendering older billionaires such as Jacob Rothschild, fourth baron of Rothschild somewhat obsolete.

In addition to this, the Rothschilds’ troubled past continues to haunt them. During the 1930s and 1940s, Joseph Goebbels, Nazi propaganda minister, used the Rothschilds Jewish origins in order to turn them into the target of vile campaigns of anti-semitic propaganda. As a result of this, certain economic and political actors are still hesitant to make business deals with the Rothschilds. They still haven’t gotten rid of the image of global-domination despots Goebbels associated with them nearly eight decades ago.

The Rothschilds have also been deeply aware of their Jewish origins, and have made it a center of their dealings with outsiders despite never really having belonged to any orthodox branches of their faith. “A jew is and will always be an outsider”, this phrase has been repeated within the family for generations and serves as a constant reminder that no matter how prosperous they might be in the present day, things can always turn sour overnight.

E. THREATS

“We are like the mechanism of a watch...each part is essential...” Salomon von Rothschild to Nathan Mayer Rothschild, c.1818

Expanding a family “empire” never comes without a price. Behind every “mythical” tale of success, there is always a hidden trail of treachery, risk- taking, and blood. The Rothschilds’ ascent is no exception to this. Having established a foothold in several nations and earning a reputation as ruthless businessmen (particularly in the banking sector), the Rothschild

30 family is prone to clash with the interests of other family dynasties. These include the likes of the Rockefellers and aristocrats in countries such as the United Kingdom.

Additionally, there is the never-ending threat of radical anti-semitic groups around the world, which have always posed a number of nightmare scenarios to the Rothschilds regarding their physical assets around the globe, as well as their direct security in some cases.

This comes hand in hand with the temptation powerful ﬁgures face when confronted with the possibility of joining secret societies. Obscure clubs (like the Bohemian Grove) have always been a source of prestige around the world. The accumulation of powerful individuals in one organization has always served as an alternative network to increase one’s power. This, of course, comes as a direct threat to families, such as the Rothschilds, given the fact that joining organizations such as the ones described above would erode original family loyalty.

However, the Rothschilds also face threats from within their own bloodline. Internal disputes with respect to inheritance, inbreeding, and envy can lead the Rothschilds down a spiral of destruction. The complete dissonance amongst members of the family could plunge them into a set of confrontations that would ultimately open the gate for other powerful groups to strip the Rothschilds of their wealth and inﬂuence.

6. Special Procedure

A. BRANCH DIRECTIVES

As mentioned above, at this moment the Rothschild family is divided into two groups: The French branch and the English branch. Hence, in this committee, there will be a special directive so that each branch can make decisions regardless of its counterpart.

This branch directive can be either secret or public. If it is public, it will be introduced to the whole committee but only voted by the members of the branch it is associated to. On the other hand, secret public directives will not be read or introduced by the dais, but sent as joint private directives from the whole branch. That being the case, at least ⅔ of the delegates

31 belonging to the branch must have their signature in the secret directive to be considered as such by the Dais. Secret branch directives must be sent ﬁrst to the Dais (to verify that the number of signatures is sufﬁcient), who will then forward it to the crisis room. Please do note that, contrary to what happens in public directives, a signature in a branch secret directive implies that the delegate is in favor of the plan it describes (as is the case in a normal joint private directive). In contrast, a signature in a public branch directive means that the delegate wishes it to be introduced, debated and voted.

The special procedure for these special directives will work as speciﬁed below:

Motions:

Motion Explanation Requirement Voting

Motion to introduce a This motion is made The directive must be Only the branch branch public directive. in order to present the previously submitted members will be able branch public directive to the dais. to vote. to ALL the committee, including members of The motion will be both branches approved with a simple majority.

Motion to introduce This motion is made when The amendment has The motion will pass and vote an one delegate or group of to be submitted to with a single majority. delegates wish to change amendment to any aspects of a previously the dais by a member the branch public introduced directive. The of the same branch directive. sponsors of the directive which the sponsors of must indicate whether the the directive belong to. amendment is friendly or unfriendly. If it is friendly to the majority of the sponsors, the amendment will be added to the directive; in case it is unfriendly to the majority of sponsors, the amendment will be voted by the whole branch. An unfriendly amendment will require a simple majority to pass.

32 Motion to start a voting pThis motion is pThe directive has Only the branch process on the branch presented when a to be submitted and members will be able public directive. delegate or group of approved by the dais to vote. delegates want to vote and introduced by on a branch public the committee before The branch public directive. being subject to a directives will be voting process. approved with a simple majority.

Disruptivity order for the special motions:

1. Motion to start a voting process. 2. Motion to introduce a directive. 3. Motion to introduce a branch public directive. 4. Motion to introduce an amendment to the branch public directive

Dais and strategy room discretion:

Given the situation and context of the committee, in some cases it will be necessary to accept just normal public directives. These cases will be at the discretion of the Crisis Director and the Dais, and branch public directive motions will not be taken into consideration.

That being said, delegates are free to write and discuss public and secret branch directives at any time during the committee, unless otherwise indicated by the dais.

33 7. Conclusions

A. QAPDMAS (QUESTIONS ALL PUBLIC DIRECTIVES MUST ANSWER)

- How will the committee’s actions affect the family’s net worth?

- How will they affect the value of the family’s assets?

- How will the committee’s actions contribute to the expansion of the family’s inﬂuence in existing and new settings?

- How will the committee’s actions help the family adapt to the harsh conditions it might encounter?

- How will the committee’s actions affect macroeconomic stability at the local, national, and global levels?

- How will the committee’s actions aid in defeating any potential rival groups within the banking and other industries?

- How will the committee’s actions protect the interests of the family?

- If the family or a member of the family is under any kind of risk, how can the committee’s actions remove him or her from peril?

- How will the committee’s actions lead to the penetration of new markets and new sectors?

- How will the committee’s actions affect the family’s public image around the world?

- How will the committee’s actions prevent outsiders from inﬁltrating the family?

34 B. RESEARCH GUIDING QUESTIONS

- What contacts outside the family do you think could aid your character?

- How will you seek to maintain an image of loyalty to the family?

- How will your character handle your personal ﬁnances as a member of the family?

- How does your character ﬁt into the dynamics of the family? What does he or she bring to the table?

- In case of insolvency issues either at the personal or family level, how does your character plan to regain its lost liquidity?

- How will your character protect the family’s physical assets?

- How will your character maintain unity between the two main branches of the family?

- What potential new ﬁelds will your character lead the family into?

- How will your character lay the groundwork for the expansion of the family’s inﬂuence into new sectors such as technology?

- How will your character manage its relationships with the key actors of geopolitics such as heads of state and/or monarchs?

- Is your character in a position that would allow them to seize power from an external source?

- How can your character handle bursts of antisemitism given the family’s Jewish origins?

- How can your character manage the numerous conspiracy theories surrounding the family? Can your character use them to the family’s advantage?

35 8. Bibliography

Alemán, Eduardo, and Yeaji Kim. “The democratizing effect of education.” Research & Politics 2.4 (2015): 2053168015613360.

Baum, Matthew A., and David A. Lake. The political economy of growth: democracy and human capital. American Journal of Political Science 47.2 (2003): 333-347.

Boomgaarden, H. G., Van Spanje, J., Vliegenthart, R., & De Vreese, C. H. (2011). Covering the crisis: Media coverage of the economic crisis and citizens’ economic expectations. Acta Politica, 46(4), 353-379.

Bouvier, J. (2019). Rothschild family | History & Facts. [online] Encyclopedia Britannica. Retrieved September 12, 2019 from https://www.britannica. com/topic/Rothschild-family.

Campbell, J. Y. (1995). Some lessons from the yield curve. Journal of economic perspectives, 9(3), 129-152.

Commission, E. (2014). Bank recovery and resolution. Retrieved 4 December 2019, from https://ec.europa.eu/info/business-economy-euro/ banking-and-finance/financial-supervision-and-risk-management/ managing-risks-banks-and-financial-institutions/bank-recovery-and- resolution_en

Conniff, R. (2003). Go Ahead, Kiss your Cousin. Retrieved January 12, 2020, from https://www.discovermagazine.com/health/go-ahead-kiss-your- cousin

Davies, R., & Richardson, P. (2011). Bank of England. Retrieved 4 December 2019, from https://www.bankofengland.co.uk/-/media/boe/ files/quarterly-bulletin/2010/evolution-of-the-uk-banking-system. pdf?la=en&hash=1B96013BA769A71DD3E49FE4590FD8719DA767A1

Elsner, W., & Schwardt, H. (2014). Trust and arena size: expectations, institutions, and general trust, and critical population and group sizes. Journal of Institutional Economics, 10(1), 107-134.

36 Ferguson, N. (1998). The House of Rothschild. Retrieved October 7, 2019, from https://archive.nytimes.com/www.nytimes.com/books/ﬁrst/f/ ferguson-rothschild.html

Financial-lib.com. (2019). A history of the Rothschild family– Financial Library. [online] Available at: https://ﬁnancial-lib.com/pt/a-history-of-the- rothschild-family/ [Accessed 12 Sep. 2019].

Gianni Tonilo & Eugene N. White (2016). “The Evolution of the Financial Stability Mandate: From Its Origin to the Present Day” in Central Banks at a Crossroads. Cambridge University Press: Cambridge, MA.

GlobalCapital. (2015). Old Money: Making a Killing. Retrieved October 20, 2019 from https://www.globalcapital.com/article/ry3hgfjfbv79/old- money-battle-of-waterloo-making-a-killing

Grifﬁths, K. (2003). Rothschild family realigns London and Paris bank operations. Retrieved January 12, 2020 from https://www.independent. co.uk/news/business/news/rothschild-family-realigns-london-and-paris- bank-operations-95332.html

Hubert, O., & Pince, A. (2016). Practice Law. Retrieved 4 December 2019, from https://uk.practicallaw.thomsonreuters.com/w-007-9978?transitio nType=Default&contextData=(sc.Default)&ﬁrstPage=true&bhcp=1#co_ pageContainer

Mankiw, N. G. (2006). Intermediate Macroeconomics. New York: Worth Publishers.

Martin, D., Pariente, S., Chartier, J., Mara, B., Riviére, G., & Prat, B. (2019). France - The Banking Regulation Review - Edition 10 - TLR - The Law Reviews. Retrieved 4 December 2019, from https://thelawreviews.co.uk/ edition/the-banking-regulation-review-edition-10/1190828/france

The New York Times (2020). Federal Reserve Cuts Interest Rates for Third Time in 2019. Retrieved January 12, 2020, from https://www.nytimes. com/2019/10/30/business/economy/federal-reserve-interest-rates.html

Penn, B. Practical Law. Retrieved 4 December 2019, from https:// uk.practicallaw.thomsonreuters.com/w-008-0211?transitionType=Defaul

37 t&contextData=(sc.Default)

Reynard, H. (n.d.). The Rise of the House of Rothschild. Retrieved October 7, 2019, from https://www.academia.edu/31111142/The_Rise_of_the_ House_of_Rothschild

Roberts, P. (2006). Review of Herbert H. Kaplan. Nathan Mayer Rothschild and the Creation of a Dynasty: The Critical Years 1806-1816. Stanford: Stanford University Press, 2006. Business History Review 80:3 (Autumn 2006), 605-607.. Retrieved from https://www.academia.edu/31715015/ Review_of_Herbert_H._Kaplan._Nathan_Mayer_Rothschild_and_ the_Creation_of_a_Dynasty_The_Critical_Years_1806-1816._Stanford_ Stanford_University_Press_2006._Business_History_Review_80_3_ Autumn_2006_605-607

Rothschild Family. (n.d.). Mayer Amschel Rothschild (1744-1812) Retrieved September 25, 2019, from https://family.rothschildarchive.org/people/21- mayer-amschel-rothschild-1744-1812

The French Banking Sector in 2016. (2017). Retrieved 16 December 2019, from http://www.fbf.fr/en/french-banking-sector/overview/the-french- banking-sector-in-2016

The Rothschild Archive. (n.d.). The Rothschild Archive - genealogy. Retrieved September 27, 2019 from https://www.rothschildarchive.org/ genealogy/

The Rothschild Archive. (2009). Nathan Mayer Rothschild (1777-1836). Retrieved from https://family.rothschildarchive.org/people/25-nathan- mayer-rothschild-1777-1836

The Rothschild Archive. (2020). Rothschild Timeline. Retrieved January 11, 2020, from https://www.rothschildarchive.org/exhibitions/timeline/

Toniolo, G. & White, E. (2015). The Evolution of the Financial Stability Mandate: From Its Origins to the Present Day. Retrieved January 11, 2020 from https://www.nber.org/papers/w20844