The BIS, globalisation and governance: more than a decade of change
26 June 2006
This fact sheet highlights the steps taken by the Bank for International Settlements (BIS) over recent years to strengthen its governance and to transform itself from a predominantly European institution into a global one serving the central banking community. The attached timeline lists key events in the globalisation of the BIS since 1994.
Central bank cooperation and globalisation
Since its foundation, the BIS has continuously adapted to changing circumstances in fulfilling its role of fostering effective cooperation among central banks. In the mid-1990s, the BIS began to broaden its presence across the globe, with particular emphasis on leading emerging market economies. Nineteen systemically important central banks, 17 of them outside Europe, have been invited to become BIS members since 1996, with most of the world's major economies and financial markets represented. The BIS now has 55 member central banks.
Today's announcement of the election of three additional members to the BIS Board of Directors reflects this wider diversity and brings the Board's membership and the corporate governance of the BIS more into line with its global role. From 1 July 2006, the Board will be expanded to include: Jean-Claude Trichet, President of the European Central Bank, which is responsible for monetary policy in the 12-country euro zone; Zhou Xiaochuan, Governor of the People's Bank of China (China is host country to the BIS Representative Office for Asia and the Pacific); and Guillermo Ortiz, Governor of the Bank of Mexico (Mexico is host country to the BIS Representative Office for the Americas). Directors are elected in a personal capacity.
While member central banks play a key role in the activities of the Bank, the BIS also works with other central banks and international organisations around the world in carrying out its mission to promote global cooperation.
The fact that the BIS has become a global organisation is also reflected in the diversity of its staff, who come from 48 countries.
A focus on clearer corporate governance
The BIS has worked hard to ensure that its governance is aligned with its mission and its role of serving as a focus of global cooperation among central banks.
In 2001, realising that private shareholding was not compatible with its commitment to building international financial stability, the BIS decided to repurchase privately held shares and redistribute them to central banks. This was completed in 2005. The BIS is now wholly owned by central banks.
The Board also acted last year to ensure that the BIS complies with sound corporate governance principles. Amendments to the BIS Statutes in 2005 implemented the recommendations of a panel of independent corporate governance experts (see the BIS website). These amendments abolished the role of President and established the General Manager as chief executive officer, reporting to the Board, and supported by the Bank's Executive Committee as an advisory body.
Responding to the needs of Asia
In 2001, the Asian Consultative Council (ACC), comprising the Governors of 11 central banks in the Asia-Pacific region, extended participation of member central banks in BIS governance. The ACC advises on the work of the Asian Representative Office and was fully involved in setting out the proposals that led to an announcement of initiatives in February 2006 to expand BIS activities in Asia and deepen its relationship with Asian shareholders.
These initiatives (a three-year research programme, an extension of banking services, and an expansion of the work of the Financial Stability Institute (FSI) in the region) build on services the BIS already provides in Asia and the Pacific, and will enhance BIS understanding of policy issues that are important to central banks and supervisors in the region.