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Definition: BIS (Bank for International Settlements)
BIS (Bank for International Settlements) is a global organization which strengthens the cooperation and coordination among the monetary and fiscal policies in its member states and acts as a bank of central banks of the member states.
It was established on 17th May 1930 with its head office situated in Basel, Switzerland. The membership of BIS extends to 60 nations including India.
The Governors of the central banks of member states meet every two months in Basel to discuss the condition of world economy and financial markets. These meetings provide up-to-date information of the developments along with challenges and policies affecting different countries.
The bank also has its own research base for statistical analysis of the global banking, foreign exchange and securities markets.
Besides, BIS also offers financial services to the central banks of member states as well as other international monetary institutions in managing their foreign reserves.
The two important goals of BIS are:
i) Regulation of capital adequacy: where BIS prescribes a minimum capital/asset ratio for the central banks
ii) Transparency in reserve requirements: in order to protect the customer interests and reduce vulnerability of the banks to risks.