Banking services for central banks
The BIS offers a wide range of financial services specifically designed to assist central banks and other official monetary institutions in the management of their foreign exchange reserves. Some 140 customers, including various international financial institutions, currently make use of these services. BIS financial services are provided out of two linked trading rooms: one at its Basel head office and one at its office in Hong Kong SAR.
The Bank continually adapts its product range in order to respond more effectively to the evolving needs of central banks. Besides standard services such as sight/notice accounts and fixed-term deposits, the Bank has developed a range of more sophisticated financial products which central banks can actively trade with the BIS to increase the return on their foreign assets. The Bank also transacts foreign exchange and gold on behalf of its customers.
In addition, the BIS offers a range of asset management services in sovereign securities or high-grade assets. These may be either a specific portfolio mandate negotiated between the BIS and a central bank or an open-end fund structure - the BIS Investment Pool (BISIP) - allowing customers to invest in a common pool of assets. The BISIP structure is also used for the Asian Bond Fund (ABF) initiative sponsored by EMEAP (the Executives' Meeting of East Asia-Pacific Central Banks) to foster the development of local currency bond markets. Further initiatives developed with a group of advising central banks have also been based on the BISIP structure. These include the BISIP ILF1 (a US inflation-protected government securities fund) and the BISIP CNY (a domestic Chinese sovereign fixed income fund).
The BIS extends short-term credits to central banks, usually on a collateralised basis. From time to time, the BIS also coordinates emergency short-term lending to countries in financial crisis. In these circumstances, the BIS advances funds on behalf of, and with the backing and guarantee of, a group of supporting central banks.
The Bank's Statutes do not allow the Bank to open current accounts in the name of, or make advances to, governments. The BIS does not accept deposits from, or generally provide financial services to, private individuals or corporate entities.