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BANK FOR INTERNATIONAL SETTLEMENT

By Abila Antony

BIS

The Bank for International Settlements (BIS) is an international organization of central banks which "fosters international monetary and financial cooperation and serves as a bank for central banks

HISTORY

established on May 17, 1930 by an intergovernmental agreement

BIS was originally intended to facilitate reparations imposed on Germany by the Treaty of Versailles after World War I

ORGANIZATION OF CENTRAL BANKS

BIS seeks to make monetary policy more predictable and transparent among its 58 member central banks

monetary policy is determined by each sovereign nation

ITS MISSION promoting discussion and facilitating collaboration

among central banks;

supporting dialogue with other authorities that are responsible for

promoting financial stability;

conducting research on policy issues confronting central banks and

financial supervisory authorities;

acting as a prime counterparty for central banks in their financial transactions;

serving as an agent or trustee in connection with international financial operations.

BIS ACTIVITIES

A meeting place for central banks The most important meetings held at the BIS

are the regular meetings of Governors and senior officials of member central banks.

Held every two months in Basel

these gatherings provide an opportunity for participants to discuss the world economy and financial markets

Other meetings of senior central bank officials

focus on the conduct of monetary policy, the surveillance of international financial markets and central bank governance issues.

Research and statistics The economic, monetary, financial and

legal research of the BIS supports its meetings and the activities of the Basel-based committees.

The BIS is also a hub for sharing statistical information amongst central banks, and for publishing statistics on global banking, securities, foreign exchange and derivatives markets.

Seminars and workshops

Through seminars and workshops organised by its Financial Stability Institute (FSI)

The BIS promotes dissemination of the work undertaken by the supervisory community

Banking services for central banks

The BIS offers a wide range of financial services to assist central banks and other official monetary institutions in the management of their foreign reserves

BASIC STRUCTURE OF THE BIS A. Decision-Making Bodies of the BIS the General Meeting of member central bank the Board of Directors the Management of the Bank

B. Committees Under the BIS 1. Basel Committee on Banking Supervision

(BCBS) 2. Committee on the Global Financial System

(CGFS) 3. Committee on Payment and Settlement

Systems (CPSS) 4. Markets Committee

THE THREE MOST IMPORTANT DECISION-MAKING BODIES WITHIN THE BANK ARE:

the General Meeting of member central bank

the Board of Directors  the Management of the Bank

GENERAL MEETINGS

The BIS currently has 60 member central banks, all of which are entitled to be represented and vote in the General Meetings. Voting power is proportionate to the number of BIS shares issued

At the Annual General Meeting, key decisions by member central banks focus on distribution of the dividend and profit, approval of the annual report

BOARD OF DIRECTORS

The Board is responsible for determining the strategic and policy direction of the BIS, supervising the management, and fulfilling the specific tasks given to it

FOUR ADVISORY COMMITTEES ASSIST THE BOARD IN ITS WORK:

The Administrative Committee reviews key areas of the Bank's administration, such as budget and expenditures

The Audit Committee meets with internal and external auditors.it examines matters related to the Bank's internal control systems and financial reporting.

The Banking and Risk Management Committee reviews and assesses the Bank's financial objectives, the business model for BIS banking operations, and the risk management frameworks of the BIS.

The Nomination Committee deals with the appointment of members of the BIS Executive Committee and is chaired by the Board's Chairman

THE BANK MANAGEMENT

The Bank Management carries out the policies determined by the Board and oversees the bank’s day-to-day activities.

The Management consists of a General Manager, who acts as the bank’s chief executive officer

BASEL COMMITTEE ON BANKING SUPERVISION (BCBS) The BCBS, governed by the BIS

consists of senior representatives of bank supervisory authorities and central banks from different countries

The BCBS formulated and published twenty-five Core Principles for Effective Banking Supervision (Core Principles) in 1997.

These principles were outlined under the topics of Licensing and Structure, Prudential Regulations and Requirements, Methods of Ongoing Bank Supervision, and Cross-Border Banking.

. COMMITTEE ON THE GLOBAL FINANCIAL SYSTEM (CGFS)

The CGFS was established in 1971

to monitor international banking markets

CGFS is charged with identifying and assessing potential sources of stress in global financial markets.

the committee works to improve the functionality and stability of financial markets.

3. COMMITTEE ON PAYMENT AND SETTLEMENT SYSTEMS (CPSS) The CPSS was created in 1990

to monitor and analyze developments in payment systems

role of the CPSS is to promote sound and efficient payment and settlement systems.

develop the most efficient payments systems.

The CPSS has developed important standards, codes, and best practices for the banking industry

4. MARKETS COMMITTEE

The Markets Committee was established in 1962

effort to stabilize the price of gold.

the committee has become a forum for discussions about recent developments foreign exchange and other financial markets, possible future trends,

The Markets Committee meets during the bimonthly meetings of the BIS member central banks.