The central bank community

• During the classical gold standard era - during which the value of the main currencies was fixed in gold - the central banks of the western world cooperated only sporadically, usually in times of crisis.
• During the First World War, many economies suffered from spiralling inflation and abandoned the gold standard. After the war, most countries sought to re-establish their currencies on a sound footing, based on a gold exchange standard. The 1922 League of Nations Conference in Genoa called for closer central bank cooperation to help restore the post-war monetary system.
• By 1927, all the major currencies had been stabilised on the basis of the gold exchange standard. The time seemed right to intensify the cooperation between the major central banks to help improve the stability of the international monetary system.

Photo caption: On 28 June 1919, the Treaty of Versailles was signed at the eponymous palace near Paris, in the Hall of Mirrors. It brought the First World War formally to an end and imposed a heavy reparations burden on Germany. The reparations issue was a major source of contention between the Great Powers throughout the 1920s.

• In July 1929, the Hague Conference reaches an agreement to revise the reparations payments imposed on Germany by the Treaty of Versailles. This includes the establishment of an international bank to help Germany settle its reparations obligations. The central banks take this opportunity to set up the Bank for International Settlements, which is mandated both to manage reparation payments and to foster central bank cooperation.
• The second Hague Conference in January 1930 approves the plan to establish the BIS. The Bank is set up as an international organisation and as a company owned by shareholding member central banks. Basel, Switzerland, is chosen as the location. The BIS opens its doors on 17 May 1930.
• At its outset, the BIS Board of Directors comprises the governors of the BIS's founder central banks - those of Belgium, France, Germany, Italy and the United Kingdom. In addition, the central bank governors of Switzerland (as the BIS host country), the Netherlands and Sweden are elected to sit on the BIS Board. The Board of Directors meets 10 times a year in Basel to discuss the affairs of the BIS and the state of the international monetary and financial system. The US Federal Reserve and the Bank of Japan decline invitations to participate directly. Shareholding membership of the BIS is quickly extended. By the end of 1931, it stands at 24 European central banks and two non-European private sector banking groups (one each from Japan and the United States).

Photo caption: The BIS finds its home in the former Savoy Hôtel de l'Univers opposite the central railway station in Basel. The Bank will remain in this neoclassical building until the mid-1970s.

• The onset of the Great Depression, the cancellation of reparation payments (1931-32) and the collapse of the gold exchange standard (1931-33) are serious blows to the international monetary system and to the BIS. Central bank governors nevertheless continue to attend the regular meetings of the Board of Directors. During the late 1930s, as international tensions grow, the BIS focuses its attention on technical central bank cooperation, for instance in clearing arrangements and gold custody services.
• In September 1939, the BIS Board of Directors decides to suspend meetings for the duration of the war. The BIS continues operations on a reduced scale in line with a self-imposed declaration of neutrality. However, the BIS's neutrality is viewed with increasing suspicion by the UK and US authorities as the BIS continues to engage in transactions with Germany's Reichsbank, and Axis-controlled central banks increasingly dominate the Bank's shareholding. As a result, the BIS's assets held in the United States are blocked.
• In July 1944, the Bretton Woods Conference decides to establish the International Monetary Fund (IMF) and the World Bank, and votes for the BIS's dissolution "at the earliest possible moment". The resolution is carried against the objections of many European central bankers and other influential conference participants, such as the British economist John Maynard Keynes.

Photo caption: A BIS Board of Directors meeting in Basel, 1931.

• In December 1946, the BIS Board of Directors gathers in Basel for the first time since the war's end. They decide that the BIS should focus its attention on intra-European cooperation, particularly for the restoration of currency convertibility and the liberalisation of cross-border payments within Europe.
• In May 1948, the BIS signs an agreement by which it hands over to the Tripartite Commission for the Restitution of Monetary Gold some 3.7 tonnes of gold received from the German Reichsbank during the war, and which was afterwards found to have been looted from German-occupied territories. In exchange, the US authorities unblock the assets held by the BIS in the United States, and agree to give no effect to the Bretton Woods resolution calling for the Bank's dissolution.
• In September 1950, the European Payments Union (EPU) is created, with the aim of restoring multilateral trade and payments between its 18 European member states. As the EPU's designated agent bank, the BIS calculates the monthly bilateral trade balances between all EPU countries and ensures that surpluses and deficits are settled through payments or credits. The system ensures a gradual return to liberalised trade and free currency convertibility within Europe.
• At the end of 1958, the EPU is wound up. Currency convertibility in western Europe has been successfully restored. The Bretton Woods system of fixed but adjustable exchange rates and freely convertible currencies for current account purposes takes full effect.

Photo caption: Participants in the BIS Annual General Meeting pose in front of the Schützenhaus Restaurant in Basel, May 1948.

• As the world's main reserve currencies, the stability of the US dollar and pound sterling on the foreign exchange markets proves critical for the viability of the Bretton Woods system of fixed and freely convertible currencies. The US monetary authorities reach out to their European counterparts at the BIS to discuss how best to support the smooth operation of the international monetary system. From December 1960 onwards, officials of the Federal Reserve regularly attend BIS meetings in Basel.
• In 1964, the European Economic Community creates a permanent Committee of Governors of the central banks of the EEC member states to monitor and discuss monetary policy issues. The EEC governors decide that the Committee should have its meetings and secretariat at the BIS in Basel.
• From 1964, officials from the Bank of Canada and the Bank of Japan join their European and US colleagues at regular meetings of the Gold and Foreign Exchange Committee at the BIS, thereby turning this into a G10 committee. It is renamed as the Markets Committee in 2002.
• In June 1969, a BIS Extraordinary General Meeting increases the Bank's capital and removes from the Bank's Statutes all references to the Young Plan (which deal with German WWI reparations). This opens the way for the Bank of Canada and the Bank of Japan to become BIS shareholding members in January 1970.
• The Reserve Bank of Australia and the South African Reserve Bank, representing two major gold-producing countries, become shareholding members of the BIS in 1970-71.

Photo caption: Michael Dealtry (BIS), Leslie O'Brien (Bank of England) and Otmar Emminger (Bundesbank) in discussion during a BIS meeting, 1970s.

• A foreign exchange markets crisis and the adoption of free floating for the world's main currencies in March 1973 marks the end of the Bretton Woods fixed exchange rate regime.
• On 13 March 1979, at the BIS in Basel, the EEC central banks sign the agreement creating the European Monetary System and the European Currency Unit (ECU).
• In 1988-89, the European Community Committee for the Study of Economic and Monetary Union (Delors Committee) meets at the BIS in Basel. It outlines the conditions for a phased introduction of European monetary union.
• In July 1990, the BIS  sets up a Service for Eastern European Countries to coordinate technical assistance to the central banks of the former communist bloc.
• In December 1993, the BIS's role as host and secretariat to the Committee of EC Governors comes to an end with the creation of the European Monetary Institute (EMI). In November 1994, the EMI completes its move from Basel to Frankfurt, where, in 1998, it is replaced by the European Central Bank (ECB).

Photo caption: Construction of the BIS Tower, the Bank's new offices, designed by Basel architect Martin Burckhardt, starts in 1972 and is completed in 1977.

• In 1996, for the first time in 25 years, the BIS's membership is enlarged as the Board of Directors invites nine emerging market central banks to become shareholding members of the BIS.
• In July 1998, the BIS opens its first Representative Office for Asia and the Pacific in Hong Kong SAR. A Host Country Agreement is concluded with the People's Republic of China.
• In July 1998, the Financial Stability Institute (FSI) is created by the BIS and the Basel Committee on Banking Supervision to assist supervisory authorities around the world in strengthening prudential supervision.
• In February 1999, the BIS Global Economy Meeting meets for the first time, comprising the governors of BIS member central banks from the major advanced and emerging market economies.
• In November 1999, a further four central banks are invited to become shareholding members of the BIS.
• In March 2001, the Asian Consultative Council is established as a forum between the BIS Board of Directors and management and the BIS's Asian member central banks.
• In November 2002, the BIS opens a Representative Office for the Americas in Mexico City. A Host Country Agreement is concluded with Mexico.
• In May 2003, six additional central banks are invited to become BIS shareholding members.
• In May 2008, the Consultative Council for the Americas is established as an advisory committee to the BIS Board of Directors.
• In 2011, four additional central banks are invited to become BIS shareholding members.
• In 2020, three additional central banks are invited to become BIS shareholding members, bringing the total to 63 member central banks. These central banks represent countries that together generate approximately 95% of global GDP.

Photo caption: The BIS Board of Directors gathered in Basel, January 2020.
Standing from left to right: Juyeol Lee, Stefan Ingves, Klaas Knot, Thomas Jordan, Mark Carney, Stephen S Poloz, Shaktikanta Das and François Villeroy de Galhau
Seated from left to right: Alejandro Díaz de León, Jerome H Powell, John C Williams, Hermann Greve, Jens Weidmann, Agustín Carstens, Christine Lagarde, Pierre Wunsch and Roberto Campos Neto