Bank for International Settlements (BIS)

http://www.bis.org

The Bank for International Settlements (BIS) is an international financial organisation representing the most important centre for the international cooperation of central banks. As a result, BIS is referred to as the bank of central banks. The BIS currently has 55 member central banks.

The BIS was established on 17 May 1930 and is the world's oldest international financial organisation. Its name was derived from its original purpose - to administer all financial operations related to post-war reparations in compliance with the Treaty of Versailles. From its beginning, however, the BIS was a place where official cooperation between central banks and financial institutions began. The head office is in Basel, (Switzerland) which was selected because of the country's neutrality. Two representative offices were then later established in Hong Kong and Mexico City. After World War II, the BIS was entrusted with the handling of the Bretton Woods monetary system but also with settlement of other serious crises which had an impact on global financial development. The BIS provided emergency help to central banks and financial institutions whose currencies and systems got into trouble (1931-33 in Germany and Austria, 1968 in France, 1966-68 in Great Britain, 1982 in Mexico, and 1998 in Brazil). The BIS provided also venue for cooperation between European central banks during the preparation and establishment of the European monetary system and the European Currency Institute, predecessor of the European Central Bank (ECB), was located at the BIS until its move to Frankfurt in 1994.

The authorised capital of the BIS is denominated in the SDR (Special Drawing Rights) and represents share capital subscribed exclusively by member central banks.

BIS Bodie

The Board of Directors currently has 19official members. Central bank Governors of Belgium, France, Germany, Great Britain, Italy and the Chairman of the Board of Governors of the US Federal Reserve System are serving as ex officio Directors. According to the BIS Statutes, no more than 9 other Governors are elected members of the Board of Directors. The Board meets at least 6 times a year and approves reports on the bank's administrative and financial activities.

The BIS Governors meet bi-monthly to monitor global economic and financial developments and to discuss problems of monetary and financial stability, financial market supervision and the management of central banks.

The Board of Directors delegates the right of decision-making regarding the bank's operations to the bank's top management, which is headed by the General Manager. In 2008, Mr. Jaime Caruana was elected as the BIS General Manager. He will take the office on 1 April 2009. The bank's management prepares and approves decisions on BIS business and banking operations as well as bank policies concerning budget and staff.

The BIS General Meeting is always held after the end of each financial year (31 March). It approves the BIS annual report as well as the amount of the dividend.

BIS Activities

The BIS cooperates with more than 100 of the world's central banks and international financial institutions, contributing regular statistical reviews and various thematic analyses as well as working on a number of committees and other professional groups:

The Basel Committee on Banking Supervision (BCBS) provides a forum for regular cooperation on banking supervisory matters. The BCBS develops standards for prudential supervision of the banking business and monitors compliance with those standards in order to strengthen the stability of the international banking system.

The Committee on the Global Financial System (CGFS) monitors the conditions of the world's financial system and, based on analyses, prepares for the G10 Governors strategic recommendations aimed at improving the functioning of financial markets and the global financial system.

The Committee on Payment and Settlement Systems (CPSS) monitors and analyses the development of domestic payment and settlement systems and prepares proposals for standards in this field.

The Markets Committee, formerly known as the Committee on Gold and Foreign Exchange, monitors the functioning of foreign exchange markets and analyses the implications of particular recent developments on their functioning, including the consideration of possible future trends.

The BIS actively contributes to the improvement of international financial structures in cooperation with other financial institutions, such as the Financial Stability Forum (FSF), the International Association of Deposit Insurers (IADI) and the International Association of Insurance Supervisors (IAIS), and alone established the Financial Stability Institute (FSI) to help strengthen financial systems and institutions on a global scale, especially when implementing the rules of prudential banking business and improving banking supervision.

The BIS is also an international forum for the coordination of technical help between central banks and at the same time provides technical help in the form of thematically focused training programmes.

Membership of the NBS in the BIS

The National Bank of Czechoslovakia (later the State Bank of Czechoslovakia), as a central bank, became a BIS member upon the organization's founding. After the split of Czechoslovakia in 1993, the country's membership share in the BIS was divided between the two successor central banks - Národná banka Slovenska (NBS) and the Czech National Bank (CNB).

The NBS Governor regularly participates in the BIS General Meeting and regular meetings of the BIS Governors.  

Updated: October 2010