TheBank for International Settlements (BIS) is aninternational financial institution which is owned by memberscentral banks. Its primary goal is to foster international monetary and financial cooperation while serving as a bank for central banks.[2] With its establishment in 1930 it is the oldest international financial institution.[3][4] Its initial purpose was to oversee the settlement ofWorld War I war reparations.[4][5]
The BIS carries out its work through its meetings, programmes and through the Basel Process, hosting international groups pursuing global financial stability and facilitating their interaction. It also provides banking services, but only to central banks and other international organizations.
French economistRaphaël-Georges Lévy (1853–1933) was a precocious proponent of an international bank, for which he suggested a location in Switzerland.Belgian statesmanLéon Delacroix (1867–1929) was an early promoter of the BIS and died during the negotiations to create it.
International monetary cooperation started to develop tentatively in the course of the 19th century. An early case was a £400,000 loan in gold coins, in 1825 and facilitated by theRothschilds, from theBank of France to theBank of England, which was facing a bank run. The Bank of England again borrowed from its French counterpart (and from theHamburger Bank) in 1836 and 1839, and lent to it in return in 1847.
In 1860–1861, because of the disruption from the incipientAmerican Civil War, the Bank of France entered a series of swap agreements in specie with the Bank of England as well as theState Bank of the Russian Empire andDe Nederlandsche Bank. That episode was recorded as the "war of the banks", ostensibly because of friction between the Bank of France and the Bank of England about the transaction.[6]: 66–67
A few years later, monetary cooperation took a novel form with a series ofinternational monetary conferences devoted to better coordination of the coinage system, even though these initiatives, like theLatin Monetary Union started in 1865, did not extend to money other than coins,[7] and therefore involved treasury andmint officials rather than bankers.[6]: 69
At theBrussels Conference in 1892, German academic Julius Wolff submitted a blueprint for an international currency that would be used for emergency lending to national central banks and would be issued by an institution based in aneutral country. In 1893, French economistRaphaël-Georges Lévy suggested the establishment of an international central bank inBern.
In 1907, Italian statesmanLuigi Luzzatti published an article in the AustrianNeue Freie Presse, referencing past examples of bilateral cooperation between central banks and emphasizing the need for more institutionalized cooperation at the international level.[8]: 21
The practice of formalized central bank cooperation made unprecedented advances among allies in the course ofWorld War I. In 1916, the Bank of England and Bank of France made agreements on bilateral lending and established a directtelegraph line between their respective offices to facilitate communication. Similar formal agreements were made that year between those two banks and theFederal Reserve Bank of New York, and in 1917 theBank of Italy opened an office in New York.[8]: 17
In the war's immediate aftermath, Dutch central bankerGerard Vissering advocated an international currency without reliance on a common gold pool.[8]: 22 Similar ideas burgeoned at theBrussels Conference of 1920, the first major discussion of international financial challenges following the war, endorsed by luminaries such as Belgian prime ministerLéon Delacroix and American bankerFrank A. Vanderlip, who suggested reorganizing Europe's national central banks along similar lines to the U.S.Federal Reserve which he had helped establish in the previous decade. At theGenoa Conference of 1922, following advocacy by several experts that includedRalph Hawtrey,Robert Horne andJohn Maynard Keynes, a resolution was passed that recommended the creation of "an association or permanent understanding for cooperation amongst central banks, not necessarily limited to Europe, to coordinate credit policies, without detriment to the freedom of each individual central bank."[8]: 23
It was decided to create the BIS in the context of negotiations overWorld War I reparations which plagued international relations in Europe throughout the 1920s. Following theTreaty of Versailles, aReparation Commission was set up in January 1920 to determine the amount of German reparations. Conferences atSpa in July 1920 andLondon in March 1921 were followed by theoccupation of the Ruhr in January 1923, and eventually theDawes Plan approved at another London conference in July–August 1924. The Dawes Plan allowed for a more constructive atmosphere, materialized in diplomacy by theLocarno Treaties in October 1925 and encouragingMontagu Norman, the influential governor of the Bank of England, to envisage the creation of what he described in September 1925 as "a private and eclectic Central Banks' 'Club', small at first, larger in the future."[8]: 30 That vision was first materialized at a meeting in early July 1927 which brought together Montagu, his friendBenjamin Strong, head of theFederal Reserve Bank of New York,Reichsbank presidentHjalmar Schacht, and Bank of France vice governorCharles Rist at a private home onLong Island (theBank of Italy had hoped for an invitation but was not included). A second meeting was scheduled inAlgeciras, but was not held because of the bad health of Strong, who eventually died in October 1928.[8]: 31
American bankerOwen D. Young (1874–1962) played a central role in the conception and establishment of the BIS in 1929–1930
Central bankersMontagu Norman (for the UK) andHjalmar Schacht (for Germany) were the most prominent protagonists of BIS meetings during most of the 1930s[9]: 50
Hôtel Stéphanie inBaden-Baden (demolished in 1964),[10] where the charter and statutes of the BIS were drafted
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 theYoung Committee for its chairman the American bankerOwen D. Young. The committee first met at the Bank of France on 9 February 1929, then in 28 successive sessions ending on 7 June 1929 at theHotel George V. The seven participating countries wereBelgium,France,Germany,Italy,Japan, theUnited Kingdom and theUnited States. The need for a jointly governed bank emerged in these discussions as a means to overcome information asymmetries and increase the likelihood that commitments would be effectively met, not least by helping the creditors to act collectively and facilitating the reinvestment of German payments into the German economy.[8]: 34 The first draft concept for the new bank was presented by Belgian bankerÉmile Francqui on 23 February 1929, and amended with suggestions from Bank of France governorÉmile Moreau. It was envisaged as a private institution with shareholders from all participating countries (including Germany) that would settle reparation payments, issue bonds to be serviced by the reparation transfers, and (as advocated by Schacht) provide international long-term credit for countries in need, including Germany.[8]: 35 In a memo to Young a few days later, Schacht first used the name "International Settlements Bank" while referring to the projected new institution.[8]: 36 Young asked his American peersWarren Randolph Burgess, Shepard Morgan andWalter W. Stewart to sail promptly to Paris, and on 7 March 1929 they presented a compromise text that formed the basis for subsequent developments.
Under the Young Committee's consensus concept, made public on 10 March 1929, the bank would serve a threefold purpose as a trustee, bank, and international organization of central bankers:
receiving, managing, and distributing German reparation annuities as atrustee;
facilitating German transfers by issuing counterpart bills, notes, and bonds; and
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 laterWorld 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.[8]: 37 An overall agreement on the future bank, with draft statutes prepared by the Bank of England'sCharles Stewart Addis, was achieved by the Young Committee on 25 March 1929.[8]: 38
Political positions within theHerbert Hoover administration made it impossible for U.S.Federal Reserve System officials to be formally involved in the initiative, but the U.S. was still able to retain major influence in the proceedings because of a shared perception amongst negotiators that the project would fail without U.S. participation. Major figures of the U.S. financial world would participate in the joint bank, and act in close cooperation with theFederal Reserve Bank of New York. The leverage held by the U.S. allowed Young andJ. P. Morgan Jr. to make sure that Americans would be in leadership position at the bank when it started operations, as indeed happened.[11]
The BIS concept was agreed to in August 1929 at the first part of theHague conference on reparations. The bank's Charter, Statutes, Trust Agreement, and Convention on its relations with the host country were subsequently drafted by a special Organisation Committee chaired by Jackson Reynolds, president of theFirst National Bank of New York,[8]: 47 which met in the discreet location of Hôtel Stéphanie (part of which later becameBrenners Park-Hotel & Spa [de]) atBaden-Baden from 3 October to 13 November 1929; the intense work was marred by the death of Delacroix from a heart attack during the proceedings.[12] Aside from Reynolds, American participants in Baden-Baden also includedMelvin Alvah Traylor, president of theFirst National Bank of Chicago, Warren Randolph Burgess, Shepard Morgan, andLeon Fraser [de] (a legal expert with theAgent General for Reparation Payments), with J. P. Morgan Jr. monitoring the proceedings and advising from London.[11]: 616-618
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'sAlberto Beneduce and by Montagu Norman) to a supranational development bank with policy tasks such as developing world trade (as advocated by Schacht and UK ChancellorPhilip 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.[8]: 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.[8]: 41 These texts included the constituent Charter and Statutes for the bank, and a Convention (intergovernmental agreement) betweenGermany,Belgium,France, theUnited Kingdom,Italy,Japan, theUnited States, andSwitzerland, establishing the bank's special status on Swiss soil and committing Switzerland to grant the Charter and approve the Statutes.[13]
Bank of Italy GovernorBonaldo Stringher (1854–1930) chaired the BIS's founding meeting
The Convention and Charter were approved by theSwiss 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 inRome, out of consideration for the Bank of Italy's governorBonaldo 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] andPierre Quesnay, for France; Reichsbank governor Schacht, for Germany; National Bank of Belgium governorLouis Franck andPaul van Zeeland, for Belgium; and theBank of Japan's London representativeTetsuzaburo Tanaka [ja] and diplomatHiroshi Saito, for Japan.[8]: 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, ahead of the first German annuities under the Young Plan due in June.[8]: 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 possessedde 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 Directorsex 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.[8]: 49-50 The inaugural BIS Board had 16 members: Franck and Francqui (Belgium); Moreau,Georges Brincard [fr] andMelchior de Vogüé [fr] (France);Hans Luther,Carl Melchior andPaul Reusch [de] (Germany); Stringher and Beneduce (Italy); Tanaka and Daisuke Nohara (Japan); Norman and Addis (UK); andGates McGarrah and Fraser (United States).[8]: 62
Early-20th-century former building ofSavoy Hôtel Univers at Centralbahnstrasse 7 in Basel, the seat of the BIS from 1930 to 1977
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 formerGrand Hôtel et Savoy Hôtel Univers across the street fromBasel 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.[8]: 62-63
Reparation payments were first suspended for one year (Hoover moratorium, June 1931) and then stopped altogether after theLausanne Agreement of July 1932 failed to be ratified.[14] 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 toLondon.[15]
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 ofappeasement ofNazi Germany by the UK and France, in March 1939 the BIS transferred 23 tons of gold it held, on behalf ofCzechoslovakia, to the GermanReichsbank, following theGerman annexation of Czechoslovakia.[16] The transfer was authorized by both theBank of England andBank of France, which the BIS consulted in a hurry; Montagu Norman approved it without consulting the UK treasury, arguing at the time: "I can't imagine any step more improper than to bring government into the current banking affairs of the BIS. I guess it would mean ruin".[8]: 208 The transfer to the Reichsbank of the Czechoslovak gold reserves has been considered the most controversial action ever taken by the BIS.[17]
At the outbreak ofWorld War II in September 1939, the BIS Board of Directors decided that the Bank should remain open, but that, for the duration of hostilities, no meetings of the Board were to take place and the Bank should maintain a neutral stance in the conduct of its business. The neutral stance, however, was increasingly hard to maintain as BIS operations were beneficial to an otherwise financially isolated Germany. German conquests disrupted the previous balance within the BIS's governance bodies: at their peak, the Reichsbank together with central banks of Nazi-occupied countries held as much as 67.4 percent of the BIS voting stock.[9]: 79 Reichsbank officialEmil Puhl went as far as referring to the BIS as the Reichsbank's "only real foreign branch".[8]: 229 While Board meetings were suspended, annual general meetings continued with shareholder banks voting by proxy.[9]: 79 Between 1933 and 1945 the BIS Board of directors includedWalther Funk, a prominentNazi official, as well asHermann Schmitz, the director ofIG Farben, andBaron von Schroeder, the owner of theJ. H. Stein Bank [de], all of whom were later convicted of war crimes or crimes against humanity; the Reichsbank's Puhl was responsible for processingdental gold looted fromconcentration camp victims, and was convicted at the NurembergMinistries Trial forwar crimes.[18]
The BIS's operations collapsed during the war, with business volume down 95 percent in 1943 compared with the prewar period. Interest payments from the Reichsbank made the bulk of its income, reaching 82 percent by the war's end. These payments were initially made in currency but from 1940 onwards were made in gold.[9]: 85 For that, the Reichsbank used resources partly derived fromNazi plunder, which came under intense criticism in the United States. So-calledNazi gold was either confiscated from prisoners or seized in victory, and was thus unacceptable as payment to the BIS.[8]: 245–252 Operations conducted by the BIS were viewed with increasing suspicion by the UK and US governments, albeit less so by the respective central banks.[9] The 1944Bretton 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 (includingHarry Dexter White and Secretary of the TreasuryHenry Morgenthau Jr.).[19] Abolition was opposed byJohn 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.
Despite the Bretton Woods resolution, the BIS eventually escaped liquidation,[20] partly thanks to the dedicated advocacy on its behalf by Belgian governorMaurice Frère.[9]: 167 In April 1945, the new U.S. presidentHarry 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.[21]
Botta building in Basel, acquired by the BIS in 1998
After World War II, the BIS had to rebuild both its reputation and its business model - in 1946 it registered a loss, for the first time in its history.[9]: 139 It was also more narrowly focused on Europe. 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 theEuropean Payments Union (EPU, 1950–58), an intra-Europeanclearing arrangement designed to help the European countries in restoring currencyconvertibility and free, multilateral trade.[22] During the 1960s – the heyday of theBretton Woods fixed exchange rate system – the BIS once again became the locus fortransatlantic monetary cooperation. It coordinated the central banks' Gold Pool[8]: 416 and a number of currency support operations (e.g. Sterling Group Arrangements of 1966 and 1968).[citation needed] The United States kept a distance but sent a senior Federal Reserve official, from 1960 to 1975 Charles Coombs, to attend the monthly governors' meetings.[9]: 180 TheGroup of Ten (G10), including the main European economies,Canada,Japan, and the United States, became the most prominent grouping.
The BIS acquired land near theBasel SBB railway station between 1966 and 1972. ArchitectMartin 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 theSwiss Heritage Society, which led to apublic referendum in 1971 in which 69% of voters endorsed a revised design with reduced height. The BIS moved into the new premises, theBIS Tower, 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 asHerstatt Bank (1974), highlighted the need for improved banking supervision at an international level. The G10 Governors created theBasel 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 andIII). Through its member central banks, the BIS was actively involved in the resolution of theLatin 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).[23] 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 theDelors Committee (Committee for the Study of Economic and Monetary Union), which produced a blueprint for monetary unification subsequently adopted in theMaastricht 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 toFrankfurt, cutting its ties with the BIS.
In 1998, the BIS acquired a second building on Aeschenplatz 1 in Basel, designed in 1986 byMario Botta and previously owned and used byUBS. 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.
At the end of 2000, such private shareholders still owned 72,648 shares, or nearly 14 percent of the BIS's capital at the time. The BIS subsequently initiated a buyback of these private owners at 16,000 Swiss francs per share, but a group of shareholders led by New York-basedFirst Eagle Investments sued and won a court ruling that raised the repurchase price to SFR 25,052.90 per share - which the specialized publicationCentral Banking Journal called a "humiliating rebuff" for the BIS Board.[9]: 242 The buyback operation was eventually completed in 2005.[27] Since then, the BIS has been wholly owned by the member central banks.
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.[28] 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.
Brass plaque sign at the entrance of the BIS building in Basel, displaying its name in four languages
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.[8]: 4 Since 1998, these meetings have been held every other month, so six times a year.
The meetings follow a perennial sequence. On Sunday evening, the inner group of governors gather at 7pm for the so-called Economic Consultative Committee, which typically lasts for about an hour followed by dinner, a key moment for informal exchange and coordination. On Monday morning, the Global Economy Meeting (GEM) brings together a broader group of central banks, typically from 9:30am to 12:30pm. On Monday afternoon, the so-called Governors' Meeting lasts from 2pm to 5pm.[9]: xi-xii With the suspension of Russia since March 2022, 30 jurisdictions are members of the GEM and an additional 22 participate as observers.
The sequence has not changed markedly from the BIS's beginnings. In the 1930s, the governors' monthly meetings started at 4pm on the Sunday, and the next two days were filled with meetings and social activities.[9]: 49
The BIS hosts the Secretariat of theBasel Committee on Banking Supervision (BCBS), colloquially referred to simply as the "Basel Committee", and with it has played a central role in establishing theBasel Capital Accords (now commonly referred to as Basel I) of 1988,Basel II framework in 2004 and more recentlyBasel III framework in 2010–2017.
Capital adequacy policy applies toequity andcapital 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 Basel standards require thecapital adequacy ratio of internationally active commercial banks to be above a prescribed minimum international standard, to improve the resilience of the banking sector.
The Committee on the Global Financial System (CGFS) was established in 1971 as the Euro-currency Standing Committee, and adopted its current name in 1999. It reports to the Global Economy Meeting.
The Markets Committee is the oldest of the BIS-hosted committees, originally established in 1962 as the Committee on Gold and Foreign Exchange. It also reports to the Global Economy Meeting.
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.[29] 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.[30]
Banknotes and coin in circulation (31 December 2018)
Reserve policy is also important, especially to consumers and the domestic economy. To ensureliquidity and limitliability 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 ofbank 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 largedeveloping nations. For instance, thePeople's Bank of China requires urban banks to hold 7% reserves while letting rural banks continue to hold only 6%, and simultaneously telling all banks that reserve requirements on certain overheated industries would rise sharply or penalties would be laid if investments in them did not stop completely. The PBoC is thus unusual in acting as a national bank focused on the country and not on the currency, but its desire to controlasset inflation is increasingly shared among BIS members who fear "bubbles", and among exporting countries that find it difficult to manage the diverse requirements of the domestic economy, especially rural agriculture, and an export economy, especially in manufactured goods.
Effectively, the PBoC sets different reserve levels for domestic and export styles of development. Historically, the United States also did this, by dividing federal monetary management into nine regions, in which the less-developed western United States had looser policies.
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 reflectingclassical economics were superseded by policies relying on undifferentiated market values – more in line withneoclassical economics.
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.[31][32]
The BIS Innovation Hub has offices in Hong Kong SAR, Singapore, Switzerland, London, Stockholm[32] and Toronto.[33]
The BIS operates in the private market as a counterparty, asset manager and lender for central banks and international financial institutions.[35] It denominates its financials in IMFspecial 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).[36]
The Chairmen concurrently held the role of President from April 1930 to May 1937.Johan Beyen of theNetherlands served as President from May 1937 to December 1939, succeeded by American nationalThomas 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.
In May 1935, the BIS was the focus of allegations ofinsider trading, relayed by an article in theBerner Tagblatt. The BIS undertook an internal investigation but did not take punitive action.[9]: 39-40
^abcdefghijklmnopqrstuvwxGianni Toniolo (2005).Central Bank Cooperation at the Bank for International Settlements, 1930-1973. Cambridge University Press.
^abcdefghijklAdam LeBor (2013).Tower of Basel: The Shadowy History of the Secret Bank That Runs the World. New York: Public Affairs.
^Abelshauser, Werner; Ritschl, Albrecht; Fisch, S.; Holtfrerich, Carl-Ludwig; Hoffmann, Dierk O., eds. (2016).Wirtschaftspolitik in Deutschland 1917–1990 [Economic Policy in Germany 1917–1990] (in German). Berlin: De Gruyter. p. 575.ISBN978-3110465266.
^Kubu, E. (1998). "Czechoslovak gold reserves and their surrender to Nazi Germany" InNazi Gold, The London Conference. London: The Stationery Office, pp. 245–48.
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