Bank For International Settlements

ARUN DANI N S
10AC05
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.“[ 
 It is not accountable to any national government.

  The BIS carries out its work through subcommittees, the

secretariats it hosts, and through its annual General
Meeting of all members.
  It also provides banking services, but only to central banks,
or to international organizations like itself.
History of the Bank

 The BIS was formed in 1930 , the main actors in the

establishment of the BIS were the then Governor of The
Bank of England, Montague Norman and his German
colleague Hjalmar Schacht, later Adolf Hitlers finance
minister. The Bank was originally intended to facilitate
money transfers arising from settling an obligation arising
from a peace treaty.
The BIS fulfils this mandate by acting as:
A forum to promote discussion and policy analysis among
central banks and within the international financial
community
A centre for economic and monetary research
A prime counterparty for central banks in their financial
transactions
Agent or trustee in connection with international financial
operations
The BIS fulfils this mandate by acting as:

As its customers are central banks and international

organisations, the BIS does not accept deposits from, or
provide financial services to, private individuals or
corporate entities. The BIS strongly advises caution
against fraudulent schemes.
Banking services for central banks

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.

Some 140 customers, including various international

financial institutions, currently make use of these services.
Role in banking supervision
The BIS provides the Basel Committee on Banking
Supervision with its twelve-member secretariat, and with it
has played a central role in establishing the Basel Capital
Accords of 1988 and 2004.
There remain significant differences between US, EU and UN
officials regarding the degree of capital adequacy and reserve
controls that global banking now requires. Put extremely
simply, the US as of 2006 favoured strong strict central
controls in the spirit of the original 1988 accords, the EU was
more inclined to a distributed system managed collectively
with a committee able to approve some exceptions.
Regulates capital adequacy
From an international point of view, ensuring capital adequacy
is the most important problem between central banks.

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

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.
Goal: a financial safety net

A "well-designed financial safety net, supported

by strong prudential regulation and supervision,
effective laws that are enforced, and sound
accounting and disclosure regimes," are among the
Bank's goals.