The Bank for International Settlements (BIS) is the oldest international financial institution. It was originally established as a joint stock company in 1930 to administer the financial management of the Young Plan, established in relation to German war reconstruction obligations. Its head office is in Basel, Switzerland and it has two representative offices: in Hong Kong SAR and in Mexico City. The Magyar Nemzeti Bank became a shareholder of the organisation in the year of its founding. BIS membership currently comprises 63 national central banks and monetary authorities, all of which are entitled to be represented and vote in the General Meetings. The BIS’s capital is held by central banks only.
Voting power is proportionate to the number of BIS shares owned by each individual country. The BIS’s activities have changed significantly over the years, with the organisation becoming an important forum for co-operation and exchanging information between central banks. Its role has only grown more vital since its creation.
Within the framework of international co-operation, the BIS conducts important research activities, collects a wide range of statistical data in the area of international finance, and gives its recommendations to the international financial community for further strengthening the international financial system. The BIS provides banking services to central banks, such as foreign reserve management and transactions involving gold. It also provides banking and fund management services for international financial institutions.
Governors and other senior officials of BIS member central banks hold bimonthly meetings, usually in Basel, to discuss current developments and the outlook for the world economy and the international financial system. The Governor of the Magyar Nemzeti Bank regularly attends the bi-monthly Governor’s Meetings.
Experts of the MNB are active participants in the seminars and expert meetings organised by the BIS, as well as in the “Central Bank Governance Network”, a network dealing with central bank governance and activities in the Member States. Its task is to enable central banks to learn in detail about each other’s activities, and to apply the best practices in their own institutions.
The BIS collects a wide range of information mainly for central banks, but it also publishes this information on its website, e.g. financial statistical data, as well as the speeches and working papers of central bank representatives. A good example of this is the Central Bank Research Hub, which facilitates access to research publications from the central banks and international financial institutions.
The BIS hosts standing committees to support central banks, and authorities in charge of financial stability, by providing background analysis and recommendations:
- Basel Committee on Banking Supervision (BCBS) – develops directives and supervisory standards;
- Committee on the Global Financial System (CGFS) – identifies and assesses potential hazards in the global financial markets, and promotes improvements to the functioning and stability of these markets.
- Committee on Payments and Market Infrastructures (CPMI) – establishes and promotes global regulatory/oversight standards for payment and settlement systems, along with other market infrastructures, and monitors and analyses developments in these areas.
- Markets Committee – analyses developments in financial markets and their effects on central bank operations.
- Central Bank Governance Forum – examines issues related to the design and operation of central banks, to foster the good governance of central banks as public policy institutions.
- Irving Fisher Committee on Central Bank Statistics – addresses statistical issues relating to economic, monetary and financial stability.
The BIS together with the Basel Committee on Banking Supervision established the Financial Stability Institute (FSI) in 1998, which primarily aims to help the work of the national supervisory authorities.
In summer 2019, BIS leadership announced the establishment of the BIS Innovation Hub (BISIH), which will foster greater collaboration amongst the global central banking community with regards to innovative financial technologies.
The MNB has been involved in the work of BISIH through the following projects:
- 2021-22: Project Dunbar – observer status
- 2023 March: Project mBridge – observer status, in preparation for participation in the next pilot phase in cooperation with commercial banking organisations
- 2023 February–June: Project Rosalind – 2 MNB+BME teams made it to the semi-finals, one team made it to the finals
- The BISIH currently operates in seven regional centres, located in Switzerland, Frankfurt/Paris, Hong Kong, Singapore, London, Stockholm and Toronto.