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Bank of International Settlement
Bank for International Settlement
The Bank of International Settlement was founded in 1930 after World War I by a group of central international banks. The purpose was to promote cooperation of central banks, provide additional facilities for international operations, and to act as a trustee or agent in regard to international financial settlements. (Wood, 2005) It was designed to be the bank of central banks. It was given power in law to work on the behalf of the banks to build their economies and promote cooperation between the international banks.
World War I was fought using borrowed funds that had to be repaid. Germany was already facing impending collapse due to the Versailles Treaty of 1919 imposing reparations, which required them to pay 132 billion gold marks per year. The central banks founded BIS with the headquarters in Basle, Switzerland. It took the power to control political systems, world economy, foreign exchanges, economic activity, and influence...
By having the ability to control treasury loans and manipulate foreign exchanges, they could influence the level of economic activity of each of the countries, as well as, the political systems. Politicians were influenced with subsequent rewards in the business world.
The funding came from central banks in Belgium, France, Germany, Italy, Japan, the United Kingdom, and three central banks from the United States. Each bank was given stock in the bank in return. Germany was then able to deposit money in BIS to repay the banks it owed money to and the reparations that were imposed on them. Other banks were able to deposit money for economic growth among the companies and international trade.
Today, the purpose is still to serve central banks in pursuit of monetary and financial stability, foster international cooperation in these areas, and to act as a bank for central banks. (Bank of International Settlements) BIS does not serve anyone except the international central banks. No…
Works Cited
Regulatory reform; remaining challenges. (2011, July 7). Retrieved from Bank of International Settlements: http://www.bis.org/speeches/sp110711,.htm
Bank of International Settlements. (n.d.). Retrieved from About BIS: http://www.bis.org/about/index.htm
Organization for Economic Cooperation and Development. (n.d.). Retrieved from infoplease: http://www.infoplease.com/ce6/history/A0836840.htm
Wood, P. (2005, Oct 19). Global Banking: The Bank for International Settlements. Retrieved from NewsWithViews.com: http://www.newswithviews.com/Wood/patrick4.htm
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