INTERNATIONAL SETTLEMENTS, BANK FOR

(BIS) international bank established at Basel, Switz., in 1930, as the agency to handle the payment of reparations by Germany after World War I and as an institution for cooperation among the central banks of the various countries. It has come to serve as a centre for economic and monetary research and consultation and as a technical agency for the execution of certain specific agreements. The bank's capital, divided into 600,000 registered shares, is fixed at 1,500,000,000 gold francs, only 25 percent of which has been paid in. Subscription of the capital was originally guaranteed in equal parts by the central banks of Belgium, France, Germany, Great Britain, and Italy and by two banking groups, one from Japan and one from the United States. All of the U.S. stock was sold in American markets, most of it being bought by Europeans. The Japanese interest was repurchased by other central banks. Liquidation of the bank was recommended at the Bretton Woods (N.H.) Conference of 1944, when the International Monetary Fund and the International Bank for Reconstruction and Development were founded, but such a step was avoided. In 1947 the bank was appointed agent for the execution of the first intra-European compensation agreement initiated under the Marshall Plan, and in 1950 it became the agent for the Organisation for European Economic Co-operation to serve the European Payments Union until its liquidation at the end of 1958. Since 1973 the bank has been the agent of the European Monetary Cooperation Fund, set up by the member countries of the European Economic Community (now the European Community). Under its statutes the bank operates only in conformity with the monetary policy of the countries concerned. Its granting of credits and its purchases and sales of gold and foreign exchange have been on a short-term basis only. The bank showed a profit every year, except for 1945; dividend payments were suspended then but resumed in 1951. The bank is administered by a board of directors consisting of governors of central banks and other appointed and elected members.