Money Wiki

Bank for International Settlements (BIS)

Multilateral Body
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Established
1930
Headquarters
Basel, CH
Jurisdiction
International
Primary Focus
Systemic Risk
Influence
De Facto Binding
Members
63

Overview

The Bank for International Settlements (BIS) is the world's oldest international financial organisation and functions as the "central bank for central banks." Established in 1930 and headquartered in Basel, Switzerland, the BIS serves 63 member central banks representing jurisdictions that together account for about 95% of world GDP. It provides banking services to central banks, hosts committees that set global standards for banking, payment systems, and market infrastructure, and produces some of the most influential economic research and financial stability analysis in the world.

Although not a regulator itself, the BIS houses the secretariats of the bodies that effectively shape global financial regulation — most notably the Basel Committee on Banking Supervision (BCBS), the Committee on Payments and Market Infrastructures (CPMI), and the Committee on the Global Financial System (CGFS). The standards these committees publish are legally non-binding but become binding in practice when implemented by national regulators — which is why a Basel III capital ratio or a PFMI principle shows up in bank regulation worldwide.

Mandate & Scope

The BIS has three core mandates:

  1. Central bank cooperation — serving as a forum where central bank governors meet bimonthly to discuss global economic and financial conditions
  2. Banking services for central banks — managing foreign exchange reserves, gold, and providing short-term credit facilities exclusively to central banks, never to private entities or governments directly
  3. Global standard-setting — hosting the committees that produce the most influential financial regulatory standards

The BIS does not regulate commercial banks, conduct monetary policy, supervise payment systems, or resolve failed institutions. It is a convener and a standard-setter — its power flows from the reputational weight of its analysis and the enforcement choices of member central banks who implement its standards.

Structure & Governance

The BIS is governed by a Board of Directors with 21 members, including the central bank governors of six "ex officio" countries (France, Germany, Italy, United Kingdom, United States, plus the host country Switzerland's SNB Chair) and 15 members elected by the full membership.

The General Manager (currently Agustín Carstens, through June 2025; Pablo Hernández de Cos takes over July 2025) leads day-to-day operations with a staff of approximately 700, drawn from more than 60 countries.

Membership is composed exclusively of central banks and monetary authorities. Commercial banks, private firms, and governments cannot be members. The BIS is funded through charges on its banking services to member central banks and returns on its own capital. It is explicitly not funded by member dues in the traditional sense — members purchase shares in the BIS, which entitle them to voting rights proportional to their stake.

Key Frameworks & Publications

  • Basel Capital Accords (1988 — Basel I; 2004 — Basel II; 2010–2017 — Basel III; 2023–2028 — Basel III Endgame/Basel IV) — the global standard for bank capital adequacy, minimum capital ratios, and liquidity requirements
  • Principles for Financial Market Infrastructures (PFMI) (2012) — standards for payment systems, central counterparties (CCPs), central securities depositories (CSDs), securities settlement systems (SSS), and trade repositories
  • CPMI-IOSCO Guidance on Stablecoin Arrangements (2022) — application of PFMIs to systemically important stablecoin arrangements
  • BIS Quarterly Review and BIS Annual Economic Report — the most-cited central bank research in the world
  • Triennial Central Bank Survey of Foreign Exchange and OTC Derivatives — the definitive data source on global FX and derivatives market size

Membership

The BIS has 63 member central banks, including all G20 members plus jurisdictions such as Hong Kong, Singapore, and the ECB. Membership is by invitation, with the Board of Directors extending offers based on the economic and financial significance of the jurisdiction. Palestine, Iran, Russia (since 2022 sanctions), and most African countries outside of South Africa, Nigeria, and Algeria are not members.

Member central banks hold shares in the BIS and are entitled to representation at the bimonthly governors' meetings. The Global Economy Meeting (GEM) of governors from systemically important economies is the most influential private forum in global central banking.

Recent Activity

In 2024 and 2025, the BIS has focused heavily on:

  • BIS Innovation Hub — central bank digital currency (CBDC) experimentation, including Project Agorá (cross-border CBDC), Project mBridge (multi-CBDC settlement), and Project Nexus (retail payments interoperability)
  • Basel III Endgame implementation — monitoring and supporting national regulator rollouts of the final Basel III reforms
  • Stablecoin and crypto-asset standards — extending the PFMI framework to cover systemically important stablecoin arrangements
  • Financial stability under monetary tightening — research and convening on bank failures (SVB, Credit Suisse) and non-bank financial intermediation

In April 2025, the BIS withdrew from Project mBridge following political sensitivity over the project's China-led development, while continuing other cross-border CBDC research.

Criticism & Controversies

The BIS has drawn criticism across several dimensions:

  • Opacity — the bimonthly governors' meetings are private and unminuted, drawing complaints that the body that effectively shapes global financial regulation operates without public accountability
  • Western bias — despite formally including emerging market central banks, critical policy committees have historically been dominated by G10 central banks; the share of emerging market perspectives in core standards has grown slowly
  • Political exposure — the 2022 project mBridge association with Chinese state interests, and the subsequent 2025 withdrawal, highlighted tensions between the BIS's technocratic self-image and geopolitical reality
  • Wartime history — the BIS held gold deposited by the Nazi-occupied Czech national bank in 1939 and transferred it under Nazi orders, a historical episode formally addressed in the 1998 BIS statement but still occasionally raised

How to Engage

  • Practitioners at banks should track Basel Committee consultations and publications. Comment letters on Basel proposals receive genuine review and sometimes shape the final standards
  • Payment system operators must internalize the PFMI framework — most national regulators (including the Federal Reserve, Bank of England, and ECB) assess their systems against PFMI principles during authorisation
  • Crypto and stablecoin projects at scale are now explicitly within the CPMI-IOSCO stablecoin guidance; operators of large-scale USD-backed stablecoins should track BIS publications closely
  • Researchers and analysts should monitor the BIS Quarterly Review and Annual Economic Report — the Committee on the Global Financial System (CGFS) reports are among the most rigorous central bank research available
  • Central bank staff can apply for secondments to the BIS Innovation Hub, which has become a significant training ground for next-generation payment system design