Bank for International Settlements

A deadline for French repayment of its bilateral debt to the United States provided impetus for a new initiative, which took the form of a Committee of Experts appointed to work out a final settlement of the German reparations, known as the

1. receiving, managing, and distributing German reparation annuities as a trustee;
2. facilitating German transfers by issuing counterpart bills, notes, and bonds; and
3. serving national central banks by taking their deposits, granting them credit, and carrying out currency and gold transactions on their behalf.

It would rely on nonpolitical staff located in a country not directly involved in the reparations disputes. Subsequent fine-tuning discussions revolved around the scope for the bank's lending to foster economic growth and trade, which would have given it a role similar to that of the later World Bank. Such a role was advocated by Schacht but opposed by France and by commercial bankers, on the grounds that it could be inflationary and create unfair competition to private-sector lenders. ^[9]: 37 An overall agreement on the future bank, with draft statutes prepared by the Bank of England's Charles Stewart Addis, was achieved by the Young Committee on 25 March 1929.^[9]: 38

Political positions within the

As in the Paris discussions earlier in the year, the Baden-Baden committee had to reconcile the different visions for the future BIS, from purely a creation of central banks (as espoused by Italy's Alberto Beneduce and by Montagu Norman) to a supranational development bank with policy tasks such as developing world trade (as advocated by Schacht and UK Chancellor Philip Snowden). Other points of contention included the future institution's official language(s), for which the committee endorsed French, and location. For the latter, several delegates favored London, but that was vetoed by the French who proposed Brussels instead, which in turn was vetoed by the British; after Amsterdam failed to gain sufficient support, a consensus was eventually found on Basel, which combined neutral country status and good railway connections.^[9]: 40-44 The founding texts of the BIS were then approved at the second part of the Hague conference, on 20 January 1930, with only minor changes from the Baden-Baden drafts such as the addition of English to French as official language.^[9]: 41 These texts included the constituent Charter and Statutes for the bank, and a Convention (intergovernmental agreement) between Germany, Belgium, France, the United Kingdom, Italy, Japan, the United States, and Switzerland, establishing the bank's special status on Swiss soil and committing Switzerland to grant the Charter and approve the Statutes.^[13]

The Convention and Charter were approved by the Swiss Federal Council and thus obtained force of law on 26 February 1930. The governors met that day and the next to formally approve and sign the statutes in Rome, out of consideration for the Bank of Italy's governor Bonaldo Stringher who was both the most senior in the group, and in poor health (he would pass away in December 1930). Aside from Stringher, who chaired the meeting, the other participants were: Vincenzo Azzolini and Alberto Beneduce, for Italy; Bank of England governor Montagu Norman and Harry Arthur Siepmann, for the UK; Bank of France governor Émile Moreau, Clément Moret [fr] and Pierre Quesnay, for France; Reichsbank governor Schacht, for Germany; National Bank of Belgium governor Louis Franck and Paul van Zeeland, for Belgium; and the Bank of Japan's London representative Tetsuzaburo Tanaka [ja] and diplomat Hiroshi Saito, for Japan.^[9]: 61 Thus the BIS was formally created in Rome on 27 February 1930. The BIS promptly opened its doors in Basel on 17 May 1930,^[14] ahead of the first German annuities under the Young Plan due in June.^[9]: 61

The legal status of the bank combined features of a private-sector company and of a public international organization. It was a limited-liability company incorporated under Swiss law, whose shares could be held by individuals and non-governmental entities. However, the rights of voting and representation at the Bank's General Meeting were to be exercised exclusively by the central banks of the countries in which shares had been issued. At the same time, the BIS possessed de facto international legal personality, was exempted from Swiss taxation and banking supervision, and its senior management enjoyed diplomatic status. The Charter stipulated that "The Bank, its property and assets and all deposits and other funds entrusted to it shall be immune in time of peace and in time of war from any measure such as expropriation, requisition, seizure, confiscation, prohibition or restriction of gold or currency export or import, and any other similar measures." Under the Statutes, the governor of each of the founding central banks was a member of the BIS Board of Directors ex officio, and had the right to appoint a second Board member, plus additional right for France and Germany to appoint a third Board member each or the duration of the Young Plan. In principle the Board could appoint up to nine additional directors, in practice however only the Dutch, Swedish and Swiss central bank governors in the BIS's first decades.

The BIS had a quick start, even though its intended task of facilitating World War I reparation payments soon became obsolete. Even before the founding meeting in Rome, the Organisation Committee had secured a two-year lease of a convenient building in Basel, the former Grand Hôtel et Savoy Hôtel Univers across the street from Basel railway station. By mid-April, Fraser had arrived from the United States and was working on the BIS's behalf from the Paris office of the Agent General for Reparation Payments, joined by McGarrah in April. The board members first met for an informal meeting in Basel on 22–23 April 1930, and adopted the bank's Statutes. They unanimously elected McGarrah as President of the BIS and Chairman of its Board, Fraser as alternate President, and Addis, Melchior and Moreau as Vice-Chairmen "with equal rank". Quesnay was appointed General Manager, albeit with the three German Board members voting against "for serious reasons of principle" (i.e. objecting to the choice of a French national rather than to Quesnay as an individual). These foundational decisions were later ratified by the first formal Board meeting on 17 May 1930, as the April meeting had also agreed that the ordinary meetings of the Board would henceforth take place in Basel on the second Monday of each month. On 17 May the BIS opened for business and formally took over the funds, accounts, capital, and records of the Agent General for Reparation Payments. On 20 May, the bank's shares were publicly issued.^[9]: 62-63

Reparation payments were first suspended for one year (Hoover moratorium, June 1931) and then stopped altogether after the Lausanne Agreement of July 1932 failed to be ratified.^[15] Instead, the BIS focused on its second statutory task, i.e. fostering the cooperation between its member central banks. It acted as a meeting forum for central banks and provided banking facilities to them. For instance, in the late 1930s, the BIS was instrumental in helping continental European central banks ship out part of their gold reserves to London.^[16]

As a purportedly apolitical organization, the BIS was unable to prevent transactions that reflected contemporaneous geopolitical realities, but were also widely regarded as unconscionable. As a result of the policy of

The 1944 Bretton Woods Conference recommended the "liquidation of the Bank for International Settlements at the earliest possible moment". This resulted in the BIS being the subject of a disagreement between the U.S. and British delegations. The liquidation of the bank was supported by other European delegates, as well as Americans (including Harry Dexter White and Secretary of the Treasury Henry Morgenthau Jr.).^[21] Abolition was opposed by John Maynard Keynes, head of the British delegation.

Keynes went to Morgenthau hoping to prevent or postpone the dissolution, but the next day it was approved; however the bank was never actually liquidated.^[22] In April 1945, the new U.S. president Harry S. Truman ended U.S. involvement in the scheme. The British government suspended the dissolution, and the decision to liquidate the BIS was officially reversed in 1948.^[23]

After World War II, the BIS retained a distinct European focus. According to an announcement made by the Swiss Government on 26 December 1952, Japan renounced all rights, titles and interests in the BIS it had acquired under the Hague Convention of January 1930. The BIS acted as Agent for the

The BIS acquired land near the Basel SBB railway station between 1966 and 1972. Architect Martin Burckhardt made three design proposals in 1969, among which the Board of the BIS selected an 82-meter high round tower. This was opposed by locals and their representation in the Swiss Heritage Society, which led to a public referendum in 1971 in which 69% of voters endorsed a revised design with reduced height. The BIS moved into the new premises, sometimes dubbed the "Tower of Basel," in 1977.

With the end of the Bretton Woods system (1971–73) and the return to floating exchange rates, financial instability came to the fore. The collapse of some internationally active banks, such as Herstatt Bank (1974), highlighted the need for improved banking supervision at an international level. The G10 Governors created the Basel Committee on Banking Supervision (BCBS), which remains active. The BIS developed into a global meeting place for regulators and for developing international standards (Basel Concordat, Basel Capital Accord, Basel II and III). Through its member central banks, the BIS was actively involved in the resolution of the Latin American debt crisis (1982).

From 1964 until 1993, the BIS provided the secretariat for the Committee of Governors of the Central Banks of the Member States of the European Community (Committee of Governors).^[25] This committee had been created by the European Council decision to improve monetary cooperation among the EC central banks. Likewise, the BIS in 1988–89 hosted most of the meetings of the Delors Committee (Committee for the Study of Economic and Monetary Union), which produced a blueprint for monetary unification subsequently adopted in the Maastricht Treaty (1992). In 1993, when the Committee of Governors was replaced by the European Monetary Institute (EMI – the precursor of the ECB), it moved from Basel to Frankfurt, cutting its ties with the BIS.

In 1998, the BIS acquired a second building on Aeschenplatz 1 in Basel, designed in 1986 by Mario Botta and previously owned and used by UBS. Since then, the BIS has used that building to host its banking operations on behalf of member central banks.

In the 1990s–2000s, the BIS successfully globalized, breaking out of its traditional European core. This was reflected in a gradual increase in its membership (from 33 shareholding central bank members in 1995 to 60 in 2013, which together represent roughly 95% of global GDP), and also in the much more global composition of the BIS Board of Directors. In 1998, the BIS opened a Representative Office for Asia and the Pacific in the Hong Kong SAR. A BIS Representative Office for the Americas was established in 2002 in Mexico City.

The BIS was originally owned by both central banks and private individuals, since the United States, Belgium and France had decided to sell all or some of the shares allocated to their central banks to private investors. BIS shares traded on stock markets, which made the bank an unusual organization: an international organization (in the technical sense of public international law), yet allowed for private shareholders. Many central banks had similarly started as such private institutions; for example, the Bank of England was privately owned until 1946. In more recent years the BIS has bought back its once publicly traded shares.^[26] It is now wholly owned by BIS members (central banks), but still operates in the private market as a counterparty, asset manager and lender for central banks and international financial institutions.^[27] Profits from its transactions are used, among other things, to fund the bank's other international activities.

After the

The Bank for International Settlements signed an agreement with Central Bank of Malaysia, Bank of Thailand, Bangko Sentral ng Pilipinas, Monetary Authority of Singapore, and the Reserve Bank of India on 30 June 2024 as founding member of Project Nexus, a multilateral international initiative to enable retail cross-border payments. Bank Indonesia involved as a special observer. The platform, which is expected to go live by 2026, will interlink domestic fast payment systems of the member countries.^[29]

The BIS members are central banks of 63 jurisdictions: 34 in

The activity of the BIS has always revolved around the regular meetings of its membership in Basel. In the 1930s, these meetings were held every month, with two interruptions resulting in ten meetings per year.^[9]: 4 Since 1998, these meetings have been held every other month, so six times a year. The meetings always start on Sundays, when the dinner is a key moment for informal exchange and coordination, and extend over the next day or two. The meeting on Monday morning is the Global Economy Meeting (GEM), preceded by a meeting of the Economic Coordination Committee on Sunday. With the suspension of Russia since March 2022, 30 jurisdictions are members of the GEM and an additional 22 participate as observers.

As an organization of central banks, the BIS seeks to make

Central banks do not unilaterally "set" rates, rather they set goals and intervene using their massive financial resources and regulatory powers to achieve monetary targets they set. One reason to coordinate policy closely is to ensure that this does not become too expensive and that opportunities for private arbitrage exploiting shifts in policy or difference in policy, are rare and quickly removed.

The stated mission of the BIS is to serve central banks in their pursuit of monetary and financial stability, to foster international cooperation in those areas and to act as a bank for central banks. The BIS pursues its mission by:

• fostering discussion and facilitating collaboration among central banks;
• supporting dialogue with other authorities that are responsible for promoting financial stability;
• carrying out research and policy analysis on issues of relevance for monetary and financial stability;
• acting as a prime counterparty for central banks in their financial transactions; and
• serving as an agent or trustee in connection with international financial operations.

The role that the BIS plays today goes beyond its historical role. The original goal of the BIS was "to promote the co-operation of central banks and to provide additional facilities for international financial operations; and to act as trustee or agent in regard to international financial settlements entrusted to it under agreements with the parties concerned", as stated in its Statutes of 1930.^[32]

The BIS hosts the Secretariat of the

Another of the committees hosted at the BIS is the Committee on Payments and Market Infrastructures (CPMI). The Committee on Payment and Settlement Systems (CPSS) was established in 1990 and extended the prior work of the Group of Experts on Payment Systems (1980) and Committee on Interbank Netting Schemes (1989), and was in turn renamed to CPMI in 2014. Its membership was extended in 1997–98, 2009, and 2018 to reach the following 28 members:

One of the Group's first projects, a detailed review of payment system developments in the G10 countries, was published by the BIS in 1985 in the first of a series that has become known as "Red Books". Currently, the red books cover countries participating in the CPMI.[33] A sample of statistical data in the red books appears in the table below, where local currency is converted to US dollars using end-of-year rates.^[34]

The Irving Fisher Committee on Central Bank Statistics gathers 100 members, mostly national central banks as well as a few regional organizations such as the Center for Latin American Monetary Studies [es] (CEMLA), Central American Monetary Council [es], and South East Asian Central Banks Research and Training Centre (SEACEN). It is led by an 11-member executive elected by its members.

Reserve policy is also important, especially to consumers and the domestic economy. To ensure liquidity and limit liability to the larger economy, banks cannot create money in specific industries or regions without limit. To make bank depositing and borrowing safer for customers and reduce the risk of bank runs, banks are required to set aside or "reserve".

Reserve policy is harder to standardize, as it depends on local conditions and is often fine-tuned to make industry-specific or region-specific changes, especially within large

For various reasons, it has become quite difficult to accurately assess reserves on more than simple loan instruments, and this plus the regional differences has tended to discourage standardizing any reserve rules at the global BIS scale. Historically, the BIS did set some standards which favoured lending money to private landowners (at about 5 to 1) and for-profit corporations (at about 2 to 1) over loans to individuals. These distinctions reflecting classical economics were superseded by policies relying on undifferentiated market values – more in line with neoclassical economics.

The Financial Stability Institute is dedicated to debates and exchanges of practices among supervisors and financial stability policymakers. It was established in 1999 in the wake of the 1997 Asian financial crisis. It has been led by Josef Tošovský from December 2000 to December 2016, and by Fernando Restoy since January 2017.

The BIS Innovation Hub, launched in 2019, extends the BIS mission of collaboration through digital innovation, developing technology-based public goods to support central banks and enhance the functioning of the financial system.^[35][36]

The BIS Innovation Hub has offices in Hong Kong SAR, Singapore, Switzerland, London, Stockholm^[37] and Toronto.^[38]

The BIS hosts the secretariats of the Financial Stability Board, the International Association of Insurance Supervisors, and International Association of Deposit Insurers. These entities, unlike the above listed committees, have no direct reporting links to the BIS.

BIS denominates its reserve in IMF special drawing rights. The balance sheet total of the BIS on 31 March 2019 was SDR 291.1 billion (US$403.7 billion) and a net profit of SDR 461.1 million (US$639.5 million).^[39]

The Chairmen concurrently held the role of President from April 1930 to May 1937. Johan Beyen of the Netherlands served as President from May 1937 to December 1939, succeeded by American national Thomas H. McKittrick from January 1940 to June 1946. The position of President remained vacant from June 1946 to June 1948, when the roles of President and Chair of the Board were again reunited until the former was abolished on 27 June 2005. Meanwhile, the Chair had been left vacant from May 1940 to December 1942.

Chair	Nationality	Dates
Gates McGarrah	United States	April 1930 – May 1933
Leon Fraser [de]	United States	May 1933 – May 1935
Leonardus Trip [nl]	Netherlands	May 1935 – May 1937
Otto Niemeyer	United Kingdom	May 1937 – May 1940
Ernst Weber	Switzerland	December 1942 – November 1945
Maurice Frère	Belgium	July 1946 – June 1958
Marius Holtrop [nl]	Netherlands	July 1958 – June 1967
Jelle Zijlstra	Netherlands	July 1967 – December 1981
Fritz Leutwiler	Switzerland	January 1982 – December 1984
Jean Godeaux	Belgium	January 1985 – December 1987
Wim Duisenberg	Netherlands	January 1988 – December 1990
Bengt Dennis [sv]	Sweden	January 1991 – December 1993
Wim Duisenberg	Netherlands	January 1994 – June 1997
Alfons Verplaetse	Belgium	July 1997 – February 1999
Urban Bäckström	Sweden	March 1999 – February 2002
Nout Wellink	Netherlands	March 2002 – February 2006
Jean-Pierre Roth	Switzerland	March 2006 – February 2009
Guillermo Ortiz	Mexico	March 2009 – December 2009
Christian Noyer	France	March 2010 – October 2015
Jens Weidmann	Germany	November 2015 – December 2021
François Villeroy de Galhau	France	January 2022 – present

General Manager	Nationality	Dates
Pierre Quesnay	France	April 1930 – September 1937
Roger Auboin	France	January 1938 – September 1958
Guillaume Guindey [fr]	France	October 1958 – March 1963
Gabriel Ferras	France	April 1963 – December 1970
René Larre	France	March 1971 – February 1981
Gunther Schleiminger	Germany	March 1981 – April 1985
Alexandre Lamfalussy	Belgium	May 1985 – December 1993
Andrew Crockett	United Kingdom	January 1994 – March 2003
Malcolm Knight	Canada	April 2003 – September 2008
Jaime Caruana	Spain	April 2009 – November 2017
Agustín Carstens	Mexico	December 2017 – present

As of August 2024:^[40]

Strong criticisms of the financial institution have been made by Dutch economist and author Ronald Bernard, who argues that numerous transactions bordering on ethics and legality have been passed through the BIS since its founding (beginning with the business dealings that the British and Americans allegedly had with the Germans during