Bank for International Settlements (BIS)

The Bank for International Settlements (BIS) is an international financial organization that unites the main banks of different countries. It was created to regulate relations between banks and simplify international settlements between them. In addition, the BIS conducts research in the field of monetary policy and the economy of developed countries.

BIS Structure

Almost all European central banks are connected with the multilateral activities of the BIS . The Bank for International Settlements helps to intelligently place foreign exchange reserves and is a kind of forum for currency cooperation between countries. At the same time, the BIS invests in traditional schemes using standard financial instruments (deposits in commercial banks, short-term investments in securities, and so on). Such transactions are currently the main activity of the bank, as well as market statistics.

If we consider the BIS from a legal point of view, then it is a corporation founded in 1930 under the Hague Agreement. The bank's activities are carried out under the supervision of the Board of Directors, which includes managers of the main banks of France, Belgium, Italy, Germany and the United Kingdom.

BIS Activities

According to the approved charter, the Bank for International Settlements does not have the right to conduct real estate transactions, in addition, it is not allowed to lend to governments and open separate accounts. In the course of carrying out banking operations of the BIS, the monetary policy of the central client bank must be taken into account.

It is also the responsibility of the international financial institution to look after international markets and create a data bank for the central banks of ten countries - Canada, Belgium, Italy, France, Japan, Sweden, USA, UK, Netherlands, Germany and Switzerland.

The BIS includes 56 central banks, including the Bank of Russia. The central office of the corporation is located in Switzerland (Basel). Although some of the organization's functions are now transferred to the International Monetary Fund (IMF), the Bank for International Settlements continues to monitor mutual settlements between major banking institutions, issue loans and guarantees, accept deposits and act as a financial intermediary.

But the main function of the BIS is to coordinate the actions of the main banks of different countries on the policy of credit and money relations. First of all, it is a currency market.

Basel Committee

In 1974, the Basel Committee was established to standardize and improve the banking settlement system. It consists of representatives of the main banks, which meet four times a year to develop standards for the activities of banking institutions. First of all, the Bank for International Settlements under the leadership of the Basel Committee is known for its research and recommendations on the compliance of bank capital. It is worth noting that the recommendations of the committee are not mandatory, but mostly they are taken into account in the legislation of the participating countries.