Introduction:
One of the oldest banking institutions, Bank for International Settlement was established in the year 1930. Bank for International settlement is having it’s headquarter in Basel, Switzerland and two regional offices, one in Hong-Kong to serve Asia and Pacific and another office in Mexico for America. Bank for International settlement provides its services to central banks and operates as per the guidelines of international law. The role and journey of Bank for International settlement has been very evolving. The institution always had been very responsive to the changing economic environment and needs of customers. At the time of inception the main function of institution was to collect, manage and distribute money from Germany after converting into local currency. Bank for International settlement was also member for Dawes loans and young loans.
Bank for International settlement shifts its focus to other activities after World war second. Bank started looking over defense activities and implementation of Bretton Woods System. Bank for International settlement started monitoring cross boundary capital flows and became a supervising regulatory for international banks and at a later stage Bank also started providing crisis management services. The Bank for International settlement provided fund to the countries like Brazil and Mexico during the time of debt crisis. In case of crisis, institution provided funding from International Monitory Fund available in the country through a structured program. Bank for International settlement promotes central banks by which they are able to maintain global financial stability.
Bank for International settlement has adopted various changes to deal with shifting global economic trends and needs. However the Bank always provides traditional services and support to central banks. Bank for International settlement is an important component and play major role in the world economy. Bank of International settlement offers its support by doing various activities.
Bank for International settlement Banking Activities:
With a customer base of around 140 central banks and financial institutions, BIS carried out wide range of banking activities. A large number of financial services are provided by the Bank of International Settlement to the central banks and other financial institutions. A team of experts are prepared to provide their assistance to its clients across the world. Currently the bank has almost one hundred and forty clients and provides expert services and advices to these clients from its two offices in Hong-Kong and Basel. Bank does not provide its services to individual customers and focuses on the international financial institutions and stress on improving their services, quality and standard. Bank does not restrict itself to offer a limited range of services based on the need of Central banks it adapts new services. The major services provided by Bank for International settlement to central banks are notice accounts, foreign exchange, Fixed-term deposits, asset management, short term credit, gold trading. Bank offer effective financial products to central banks to increase their foreign assets return. Bank for International settlement in case of financial crisis also offer short term lending to central banks .
Major Banking Product and Services- under the banking activities Bank for International settlement offered various products and services mainly developed to serve Central banks, financial institutions and authorities. As per Bank for International settlement their customers required three things from them; security, return on investments and liquidity. To serve these three major needs Bank for International settlement offers;
For security, Bank for International settlement offers equity capital and reserve.
Bank for International settlement offer lucrative return on deposits.
Bank for International settlement Money Market Instruments –
Sight/notice accounts
Fixed-term deposit on fixed as well as floating rates
Index-linked fixed-term deposits
Standard amounts, non-standard amounts, Maturities
Bank for International settlement Tradable Instruments –
Available in all major currencies
Maturities are available in fixed rate for period up to one year
Medium term instruments are present with feature of embedded call
Foreign Exchange Services and Gold Services –
Both services are available in spot deal, outright forward, swap, options.
Overnight orders, safety and settlement facilities
Asset Management Services –
Investment made in government bonds
Bank for International settlement investment pool
Other Services –
Short term lending
Trustee for various government loans
Work as collateral agents
Bank for International settlement provide detailed financial statement every year.
Several Seminars and workshops on monetary issues- a number of seminars and workshops are organized by the Bank of International Settlement to promote the cooperation and to share the thoughts among the participants on several issues. These seminar and workshops also help the bank for international settlement in publicize the works done by the bank and to aware the people about its contribution in the world economy.
Analysis
The bank for international settlement is providing its services to improve the current situation of the world economy. A number of activities, research, debates, seminars, meetings are organized by the Bank to discuss the challenges and to remove these challenges and strengthen the economy of the world. The bank provides its expert services and research works to a large number of countries and major financial institutions and not to individual clients because the motive of the bank is not making money but to improve the economic situation of world economy. Bank for international settlement is playing a praiseworthy role in the economy of the world and has helped many countries in improving their economic condition. The demand of the hour is that the bank should pay more attention to the countries of Africa and Asia and help them in improving the economy of this region because the condition of poverty is very bad among the countries of this region.
Conclusion
After analyzing several aspects of the bank of international settlement and the roles played by it in the economy of world and a number of steps taken towards a better economic condition, it is good to say that the bank of international settlement is continuously working for a better future for everybody. Bank of international settlement is a financial institution that has helped several countries during tough times in their economy through its intensive research and a team of dedicated experts. Considering the role played by the bank and its effect on the economy of world it can be concluded by saying that there is a huge requirement of such institutions for a faster improvement in the economic situation of the world economy. These new institutions will be focusing on the countries of Asia and Africa to improve their poor economic condition because a larger number of populations in these countries are struggling for the basic requirements in their life.
References
Baker, J. C. (2002). The Bank for International Settlements: evolution and evaluation. Westport: Greenwood Publishing Group.
Bank for International Settlements. (n.d.). Retrieved November 9, 2011, from www.bis.org: http://www.bis.org/about/functions.htm
Central Banks. (n.d.). Retrieved November 9, 2011, from www.centralbanksguide.com: http://www.centralbanksguide.com/bank+for+international+settlements/
The Global Transparency Resource. (n.d.). Retrieved November 9, 2011, from www.ifitransparencyresource.org: http://www.ifitransparencyresource.org/bis-bank-for-international-settlements.php
