Bank for International Settlements (BIS) Definition
The Bank for International Settlements (BIS) is an international financial institution established in 1930, which serves as a bank for central banks. It’s focused on promoting monetary and financial stability around the world. It’s often described as the central bank’s central bank.
Bank for International Settlements (BIS) Key Points
- The BIS is an international organization that serves as a bank for central banks.
- Its main objectives are to promote monetary and financial stability worldwide.
- It was established in 1930 and is based in Basel, Switzerland.
- The BIS is not accountable to any single national government and operates under international law.
What is the Bank for International Settlements (BIS)?
The Bank for International Settlements, also known as BIS, is an internationally established financial institution that acts as a bank for the central financial institutions of different countries. Its main role is to promote monetary and financial stability around the globe. Unlike traditional banks, the BIS doesn’t deal with individual or corporate clients.
Who uses the Bank for International Settlements (BIS)?
As the bank for central banks, the BIS serves its member countries’ central banks and international entities, providing them with a broad range of banking services including impairing sovereign gold, foreign exchange and financial market assets. It enhances cooperation between central banks and other agencies in pursuit of monetary and financial stability.
When was the Bank for International Settlements (BIS) established?
The BIS was established in 1930. It was originally founded by central banks in Belgium, France, Germany, Italy, Japan, and the United Kingdom, along with a consortium of commercial banks in the United States. Its establishment was part of efforts to facilitate the reparation payments imposed on Germany by the Treaty of Versailles at the end of World War I.
Where is the Bank for International Settlements (BIS) based?
The central office of the BIS is based in Basel, Switzerland. However, it has two representative offices in the Hong Kong SAR and in Mexico City. The decision to house its headquarters in Basel was an intentional move to facilitate its impartiality and neutrality, as Switzerland was and continues to be recognized as neutral territory.
Why is the Bank for International Settlements (BIS) important?
The BIS is important as it plays a critical role in ensuring global financial and monetary stability. It accomplishes this through its services such as banking activities, research and statistics, monetary and economic policy, and by acting as a hub for central banks to exchange information and promote cooperation.
How does the Bank for International Settlements (BIS) operate?
The BIS operates under international law and follows strict statutes that provide the legal basis for its relationship with the central banks. The bank carries out its work through subcommittees, meetings, and through the initiatives of the central bank Governors themselves. Its banking services are provided exclusively to central banks and international organizations, and its profits are distributed in the form of a dividend among its member central banks.
