BIS releases 76th Annual Report at Annual General Meeting
26 June 2006
"Resilience to mounting strains" is how the Bank for International Settlements (BIS) has characterised the recent performance of the global economy and international financial system in its 76th Annual Report, released today.
Over the last year, the global economy has powered on, amid growing concerns about inflationary pressures. As a result, policy stances that had previously contributed to extremely easy monetary conditions worldwide have begun to be modified. This has included further monetary tightening in the United States and Europe, the end of "quantitative easing" in Japan, and the announced change in China's exchange rate regime. The good news is that these moves had not, as of late May 2006, been accompanied by any widespread stress in global financial markets even though volatility has recently risen and some asset prices have fallen sharply.
Jean-Pierre Roth, Chairman of the BIS Board of Directors, presided over the Bank's Annual General Meeting, held in Basel, Switzerland today. It was attended by representatives from more than 120 central banks and international institutions.
In presenting the Annual Report to meeting participants, Malcolm Knight, BIS General Manager, noted that "uncertainties about inflation and asset prices mean that, at the current juncture, central banks need to be especially vigilant towards the threats to medium-term price stability". He added that governments also have work to do to ensure steady non-inflationary growth and fiscal sustainability in the years ahead. Fiscal restraint, particularly in countries which have large current account deficits, would be desirable. Structural reforms to facilitate internal adjustments between the tradable and non-tradable sectors in most large countries would also be helpful.
The BIS reported a balance sheet total of SDR 220.1 billion (USD 317 billion) at the end of March 2006. Nearly USD 270 billion of official foreign currency reserves are deposited with the BIS, around 6% of the world's total. The Bank also reported a net profit of SDR 599.2 million (USD 864 million) for last year. The Bank's shareholding central banks will receive a full dividend of SDR 245 per share, a 4.2% increase over that for the previous financial year.