BIS as a bank for central banks

As stated in its corporate objectives, the BIS is committed "to serve as a prime counterparty for central banks in their financial transactions, by providing an appropriate range of banking services and maintaining its reputation for absolute confidentiality and security".

The BIS has developed a range of banking services specifically designed to assist central banks and monetary authorities in the management of their foreign exchange and gold reserves. It also acts as a banker to, and manages funds for, international financial institutions. The BIS does not accept deposits from, or generally provide financial services to, private individuals or corporate entities, nor it is permitted to make advances to governments or open current accounts in their name.

Location

The BIS Banking Department offers a very broad range of banking services out of the dealing room in its headquarters in Basel, Switzerland. In October 2000 the BIS also opened a Regional Treasury dealing room at its Representative Office in Hong Kong SAR, giving central banks within the Asian region better access to BIS financial services during their trading hours. This Regional Treasury has no legal personality of its own and all transactions dealt through it are therefore concluded in the name of the BIS in Basel. In addition, the BIS has a Representative Office for the Americas in Mexico City which also helps to promote BIS banking services.

Credit standing

The BIS is an international financial institution owned by 55 central banks and monetary authorities, with substantial accumulated reserves and a range of immunities granted to assist it in its work. The BIS Board of Directors consists of the Governors of the G10 central banks, together with certain other representatives nominated by them.

Risk control

The risks arising from the BISs various banking activities are rigorously monitored by a separate risk control unit, independent from the Banking Department, reporting directly to the Deputy General Manager (the second most senior executive officer at the BIS).

Liquidity

The BIS quotes bid/offer prices reflecting market conditions for its tradable instruments throughout its dealing hours.

Pricing

BIS rates are generally higher than the yield on widely traded prime sovereign paper of comparable maturity though, in view of the BISs outstanding credit quality, they are slightly lower than those offered by commercial banks. Each investment instrument is competitively priced in accordance with the degree of liquidity it offers.

Immunities

The property and assets of the BIS - along with assets of third parties entrusted to the BIS - enjoy immunity protection in many jurisdictions from such governmental measures as expropriation, seizure or confiscation. In addition, the BIS has been granted various immunities at the jurisdictional level in Switzerland, the country of its seat, in the Peoples Republic of China, where the BIS has a representative office in Hong Kong SAR, and in Mexico, where a new representative office has recently been established. The main purpose of these immunities is to protect central bank assets held with the BIS from measures of compulsory execution and sequestration, and particularly from attachment.