Bank for International Settlements

Bank for International Settlements (BIS), an international bank founded in 1930 by the Hague Agreements to promote cooperation between national central banks, to provide facilities for international financial operations, and to act as agent or trustee in international financial settlements. Its original function was to facilitate German reparation payments after World War I (1914-1918), but over time its activities broadened.

Funds deposited with the bank are generally loaned to central banks, but are also used for traditional types of investment. During the later part of the 20th century, bridging loans were made to nonmember countries in Latin America that were suffering from crippling debts. This was done to preserve the viability of the international financial system. The necessity of keeping its monetary reserves available at short notice means that the BIS must maintain a high degree of liquidity.