BIS

What Is the BIS?

The Bank for International Settlements (BIS) is an international financial institution owned by 63 central banks, headquartered in Basel, Switzerland. Founded in 1930 (making it the oldest international financial institution), it serves as a bank for central banks, a forum for international monetary and financial cooperation, and a center for research and statistics on global banking and financial markets.

The BIS hosts several important committees and groups, most notably the Basel Committee on Banking Supervision (which develops global banking standards) and the Committee on the Global Financial System.

Why It Matters for Markets

The BIS's influence on markets operates through several channels. Most directly, the Basel Committee's banking regulations determine capital and liquidity requirements for banks worldwide, affecting credit availability, market liquidity, and financial institution behavior. Changes to Basel standards can reshape entire markets.

BIS research is widely followed by central bankers, regulators, and macro investors. The quarterly BIS Bulletin and Annual Economic Report often contain early warnings about financial risks and insightful analysis of market dynamics. The BIS was notably ahead in identifying risks from rapid credit growth before the 2008 crisis and has been vocal about risks from prolonged low interest rates, excessive leverage, and climate-related financial risks.

BIS statistical publications provide definitive data on global derivatives outstanding, foreign exchange market turnover, cross-border banking flows, and international debt securities. These datasets are essential for understanding global financial interconnections and identifying building vulnerabilities.

The BIS and Central Bank Cooperation

The BIS's most important function may be its least visible: facilitating regular communication among central bankers. Bimonthly meetings bring together central bank governors to discuss economic conditions, policy challenges, and financial stability risks. These discussions occur outside the public spotlight and can influence monetary policy coordination.

During crises, the BIS has provided emergency liquidity to central banks and facilitated coordinated policy responses. Its role as a trusted intermediary among central banks gives it unique influence in the international monetary system. For market participants, understanding the BIS's perspective and following its research provides insight into how the world's central banks are thinking about risks and policy responses.