The Bank for International Settlements
Conceived to manage the payment of damages after WWI, BIS was definitely established in 1930. Since then, after the troubled period of WWII, it has continued to operate as a clearing house between central banks. After Bretton Woods and the decision to keep it alive adding to that settlement function, it became a support centre for central banks. Besides helping to stabilize some currencies in the 1970s (the French franc and the UK pound), and contributing to some IMF actions, it helped in the creation of the European Monetary Union that later became the European Monetary System. Also in its support function a statistical centre, the Irving Fisher Committee on Central Banks Statistics (IFC) was created as an economic research centre. To fulfil its support and coordination functions between banks, BIS sat, among others, on two committees: one for prudential surveillance – the Basel Committee for Banking Supervision (BCBS), called the Basel Committee; and the Solvency Committee for the Insurance Sector (International Association of Insurance Supervisors (IAIS)). The BCBS received a mandate to identify sources of stress in global financial markets. It comprises representatives of 27 member countries. BIS also has a committee on payment and settlement systems (for depositary and settlement infrastructures). All of these committees issue standards to become regulations when endorsed by nations. The whole system relies on commitments from member states. When not endorsed, they have no transnational legal value.
With no hierarchic link but technical resources, BIS also became the home for the FSB, which is now the central body for the international surveillance scheme. The capital is 600,000 shares, 400,000 having so far been issued, representing 3000 million SDR as defined by the IMF. They have been allocated to the 60 member states through their respective national central banks. The majority stake of the issued capital is owned by Belgium, France, Germany, Italy, the UK and the USA. A board of 20, usually the governors of the central banks, manages the institution. It currently employs a staff of around 650 from 54 countries.
Through the G20 forum of heads of state, the Basel and Solvency committees of no legal grounding have gained reconnaissance. The G20 countries have committed to adopt a regulation programme with goals including the commitment to adopt Basel's and Solvency's committee recommendations. BIS is very much the place of expertise and bank representatives.
An informal committee of experts factually representing the most important private financial institution is operated by BIS. With the paramount importance of the Basel and Solvency committees, BIS gives an important contribution to surveillance and regulation for banks and insurance providers. It also provides a statistical collection tool for international clearings and prudential ratios.