Organisation, governance and activities of the Bank
26 June 2006
This chapter summarises the BIS's contribution to international cooperation directed towards greater monetary and financial stability. It describes the institutional framework in which this cooperation is pursued, and highlights activities that marked the past year.
In June 2005 corporate governance was strengthened through a revision of the BIS Statutes approved at an Extraordinary General Meeting of the Bank's shareholders. Based on recommendations of a group of eminent legal experts, the revision abolished the position of President of the Bank, and recognised terms of reference for the Executive Committee as an advisory committee to the General Manager. Charters for the Board of Directors and several operational committees were drawn up.
In early 2006, the BIS announced initiatives to deepen relationships with its strategic partners in Asia following an intensive consultation process with BIS member central banks in the region. The initiatives comprise a three-year research programme on monetary and financial issues in Asia and the Pacific, an expansion of the work of the Financial Stability Institute in the region, and an extension of banking services from the BIS Representative Office in Hong Kong SAR.
The bimonthly meetings of Governors of BIS member central banks in Basel are an important element of the framework for international cooperation. In particular, the Global Economy Meeting monitors economic and financial developments and assesses vulnerabilities, while the meetings of the G10 Governors and those of Governors of key emerging market economies explore topical themes. In 2005/06, special meetings were also organised on issues of interest to central banks, to which a broad range of senior non-central bank and private financial sector officials were invited.
New activities during the period under review included the expansion of the range and country coverage of the economic, monetary and financial statistics compiled by the Bank. The Joint External Debt Hub (JEDH), delivering comprehensive external debt statistics compiled from national and creditor/market sources, was launched jointly by the BIS, the IMF, the OECD and the World Bank in March 2006. Also in early 2006, the Irving Fisher Committee on Central Bank Statistics (IFC), a global forum of users and compilers of statistics at central banks, moved its permanent secretariat to the BIS.
In May 2005, the Bank established the Central Bank Governance Forum, formalising its long-standing activities to foster good governance of central banks as public policy institutions. The IFC and the Governance Forum join the Basel Committee on Banking Supervision (BCBS), the Committee on the Global Financial System (CGFS), the Committee on Payment and Settlement Systems (CPSS) and the Markets Committee as groups operating at the BIS. Independent organisations with secretariats located at the BIS are the Financial Stability Forum, the International Association of Insurance Supervisors and the International Association of Deposit Insurers.
Significant committee publications in 2005/06 included an update of the Basel II capital adequacy framework (BCBS, November 2005), general guidance on payment systems (CPSS, January 2006) and an analysis of housing finance in the global financial market (CGFS, January 2006). Additionally, the Bank's 75th anniversary in 2005 provided new opportunities for disseminating information about the historical and contemporary role of the BIS in promoting international financial cooperation. In January 2006, a new BIS website was launched, providing an expanded research hub featuring analytical work published by participating central banks.
The Bank continued to serve as a prime counterparty to central banks in their financial operations. In addition, it performed agent and trustee functions for a variety of financial transactions. Created at the initiative of EMEAP member central banks and monetary authorities, the two Asian Bond Funds (ABF1 and ABF2) are administered by the BIS under an open-ended fund umbrella.
The balance sheet grew, closing at SDR 220.1 billion at end-March 2006, representing a year-on-year increase of 22%. Net profits for the Bank's 76th financial year amounted to SDR 599.2 million, compared with SDR 370.9 million in the preceding year.