Often known as the Bank of International Settlements, the BIS plays a central role in international money flows…
The Bank of International Settlements is the global banker for the world’s central banks
The BIS is the global banker for the world’s central banks
According to the homepage of the Bank for International Settlements, the mission of the BIS is “to serve central banks in their pursuit of monetary and financial stability, to foster international cooperation in those areas and to act as a bank for central banks.”
Essentially the Bank for International Settlements is the central banker of all the world’s central banks. Its domain is limited to this upper echelon of the banking sector.
The BIS was created in 1930 as the international body responsible for overseeing the war reparations to be made by Germany after World War I.
Since then its role has expanded to where it is now one of the pre-eminent bodies governing international finances, along with the International Monetary Fund (IMF).
Broadly speaking its goals are to promote and maintain international financial stability, along with ensuring international monetary flows essential to trade and the general running of the world economy.
Rather than regurgitate here what others have done far better, I offer the following links for those who wish to take their study of the BIS a step further:
Investopedia BIS Introduction
Investopedia BIS In Detail
How can we use the Bank for International Settlements as traders? They publish reports on the world economy on a regular basis and conduct ongoing research with respect to the state of International finances. Specifically, the following publications and reports are interesting and informative and will give you a good backdrop to view the current market against:
The Bank for International Settlements building in Basel, Switzerland
The BIS building in Basel, Switzerland
Their Annual Report
Their Quarterly Review
Most importantly, the BIS publishers the results of a global central bank survey it coordinates and conducts every 3 years. The most recent survey was published in December 2010.
The survey covers the foreign exchange market and over-the-counter derivatives markets. This will give the trader an excellent macro overview of the current forex market with respect to prevailing sentiment and developing trends.
All the research above is available for public viewing on the BIS website at the following links:
Triennual Fx Global Market Survey
Admittedly, a lot of the data is somewhat dry and detailed, but it is easy to read and glean the facts that you personally find pertinent. As a free, authoritative resource, the BIS site takes some beating. All traders at some stage in their forex trading career should familiarise themselves with the contents of this site.
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