Bank For International Settlements

ARUN DANI N S 10AC05

or to international organizations like itself. but only to central banks.Bank For International Settlements  The Bank for International Settlements (BIS) is an intergovernmental organization of central banks which "fosters international monetary and financial cooperation and serves as a bank for central banks. the secretariats it hosts.  It also provides banking services.  The BIS carries out its work through subcommittees. [  It is not accountable to any national government. and through its annual General Meeting of all members. .

Montague Norman and his German colleague Hjalmar Schacht. The Bank was originally intended to facilitate money transfers arising from settling an obligation arising from a peace treaty. . the main actors in the establishment of the BIS were the then Governor of The Bank of England. later Adolf Hitlers finance minister.History of the Bank  The BIS was formed in 1930 .

The BIS fulfils this mandate by acting as: y A forum to promote discussion and policy analysis among central banks and within the international financial community y A centre for economic and monetary research y A prime counterparty for central banks in their financial transactions y Agent or trustee in connection with international financial operations .

or provide financial services to. The BIS strongly advises caution against fraudulent schemes. the BIS does not accept deposits from. private individuals or corporate entities. .The BIS fulfils this mandate by acting as: y As its customers are central banks and international organisations.

currently make use of these services. y Some 140 customers.Banking services for central banks y The BIS offers a wide range of financial services specifically designed to assist central banks and other official monetary institutions in the management of their foreign exchange reserves. including various international financial institutions. .

the US as of 2006 favoured strong strict central controls in the spirit of the original 1988 accords. Put extremely simply. . EU and UN officials regarding the degree of capital adequacy and reserve controls that global banking now requires.Role in banking supervision y The BIS provides the Basel Committee on Banking Supervision with its twelve-member secretariat. the EU was more inclined to a distributed system managed collectively with a committee able to approve some exceptions. and with it has played a central role in establishing the Basel Capital Accords of 1988 and 2004. y There remain significant differences between US.

y Capital adequacy policy applies to equity and capital assets. These can be overvalued in many circumstances because they do not always reflect current market conditions or adequately assess the risk of every trading position y Accordingly the BIS requires the capital/asset ratio of central banks to be above a prescribed minimum international standard. for the protection of all central banks involved. .Regulates capital adequacy y From an international point of view. ensuring capital adequacy is the most important problem between central banks.

effective laws that are enforced." are among the Bank's goals. and sound accounting and disclosure regimes.Goal: a financial safety net y A "well-designed financial safety net. supported by strong prudential regulation and supervision. .

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