2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16
The Bank for International Settlements (BIS) is an international financial institution that unites the main banks of different countries. It was created to regulate relations between banks and simplify international payments between them. In addition, the BIS conducts research in the field of monetary policy and the economy of developed countries.
BIS structure
Practically all European central banks are involved in the multilateral activities of the BIS. The Bank for International Settlements helps to wisely allocate foreign exchange reserves and is a kind of forum for foreign exchange cooperation between countries. At the same time, the BIS invests according to traditional schemes using standard financial instruments (deposits in commercial banks, short-term investments in securities, and so on). Such operations 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 onbasis of the Hague Agreement. The activity of the bank is carried out under the control of the Board of Directors, which includes the governors of the main banks of France, Belgium, Italy, Germany and the UK.
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 provide loans to governments and open separate accounts for them. In the process of conducting banking operations of the BIS, the monetary policy of the client central bank must be taken into account.
The responsibilities of the international financial institution also include looking after international markets and creating a databank for the central banks of ten countries - Canada, Belgium, Italy, France, Japan, Sweden, USA, UK, the Netherlands, Germany and Switzerland.
The BIS includes 56 central banks, including the Bank of the Russian Federation. The head office of the corporation is located in Switzerland (Basel). Despite the fact that some functions of the organization are now transferred to the International Monetary Fund (IMF), the Bank for International Settlements continues to control mutual settlements between the main banking institutions, issue loans and guarantees, accept deposits and act as a financial intermediary.
But at the same time, the main function of the BIS is to coordinate the actions of the main banks of different countries on the policy of monetary relations. First of all, it is the currency market.
Basel Committee
BIn 1974, the Basel Committee was established to standardize and improve the banking settlement system. It consists of representatives of major banks, which meet four times a year to develop standards for the activities of banking institutions. The Bank for International Settlements, under the control of the Basel Committee, is primarily known for its research and advice on bank capital matching. It is worth noting that the recommendations of the committee are not binding, but they are mainly taken into account in the legislation of the participating countries.
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