The Bank for International Settlement

Established in 1930 by the Hague agreement among the ten founding central banks,1 the Bank for International Settlements (BIS) is an intergovernmental body. The BIS is the world’s oldest international financial institution and remains the principal center for international central bank cooperation. The BIS is protected by the 1987 Headquarters Agreement with the Swiss government, which has no jurisdiction over the BIS premises. The BIS and its employees are both exempt from Swiss taxes.2 Further, the BIS assets are immune from all jurisdictions under Swiss law. That is, they cannot be seized. In July 1944, the United Nations Bretton Woods Conference adopted a resolution calling for the liquidation of the BIS, on the grounds of its supposed domination by the Axis Powers during war and because its traditional field of activity would henceforth be largely covered by the soon to be created IMF and IRBD. However, in 1946 the governors of the European Bank started to reconvene again at Basel, and in 1948, the liquidation resolution was officially revoked.3 While the suspicious Congress of the United States forbad the US Federal Reserve from joining the BIS formally, the New York Federal Reserve and its allied Morgan interests were able to work closely with the BIS, and the BIS treated the New York Federal Reserve as if it were the central bank of the United States.4 With the collapse of the Bretton Woods system, in the 1970s, the BIS’s role became even prominent. The BIS aims to foster international monetary and financial cooperation and serves as a bank for central banks. The BIS offers a framework for discussion and decision making among central banks. It is a limited liability company, incorporated under Swiss law, with an issued share capital. The BIS’s shares are traded on stock markets, and it is held by private shareholders. Membership of the BIS is still a privilege rather than a right.