The Bank for International Settlements (BIS) acts as the “central bank for central banks.” It oversees financial operations and international cooperation and fosters financial and monetary stability by creating a forum of central banks of countries.
Based in Switzerland, the BIS offers a wide range of services for its members. Aside from overseeing financial operations, it organises regular meetings between Central bank governors of member states. The meetings provide the ground for these financial stability institutes to reach a consensus through analysis on issues and sharing of crucial resources on financial regulation, banking operations, and financial services.
The bank also researches key monetary policy issues, like how to improve banking services in member countries, green finance, and other important areas that can benefit monetary authorities and global financial markets.
The Bank for International Settlements is the oldest financial institution in the world. It was created in 1930 out of the Hague agreement. Its role then was to come to the aid of countries in Europe by providing banking facilities and aid reparations from Germany to European countries.
Founding members include the national governments of Britain, France, Italy, Belgium, Germany, Switzerland, Japan, and the USA. From the 1970s to the 1980s, BIS played a crucial role for budgetary resources by overseeing cross-border capital flows during the period of the American debt crisis and related financial issues.
BIS and the Global Banking System
As one of the agencies that play a central role under BIS, the Basel Committee on Banking Supervision has been critical to the global banking system. This supervisory authority was formed in 1974 as the global standard-setter for the central banking community globally. Its purpose is to regulate the banking activities of commercial banks and provide necessary resources for banking transaction regulation for member state banking sectors.
Over the years, it has worked with some of the biggest financial organisations and most active banks in the world, like the European Central Bank, Federal Reserve, Norges bank, the Central Bank of Iceland, and the International Monetary Funds (IMF).