Give point wise answer the activities undertaken by the banks
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Banking operations
As an intermediator of central bank funds, the guiding principles of the Bank in serving its customers have always been liquidity, security, confidentiality and return. To achieve these goals, the Bank has applied a strategy of offering to central bank customers liquid instruments that provide a yield pickup over qualitatively comparable alternatives for central bank portfolio investments, and of rigorously monitoring and managing credit and market risk.
Within the framework of this strategy, the Bank witnessed an increase in its balance sheet over the past decade from just below USD 90 billion in the 1990/91 financial year to nearly USD 175 billion at the end of financial year 2001/02, with over USD 20 billion of this increase coming in the past year.
In terms of market share, the Bank intermediates about 6.5% of world international reserves, serving almost 120 central bank customers. The growth in Asian deposits has been especially buoyant. This region accounted for less than one quarter of total currency deposits at the end of 1998. Right now, the region claims a share of about 45%.
Medium-Term Instruments have been a major attraction for central bank funds in recent years. Created in late 1998 to accommodate customers' requests for longer-dated tradable instruments, purchases of MTIs grew to a record USD 48 billion at the end of 2001. However, expectations of rising interest rates in early 2002 led many central banks to shorten the duration of their portfolios, also at the BIS. As a result, the MTI book declined slightly.
In addition to intermediating central banks' reserves, the Bank is offering its customers a number of other financial services. These include short-term credits to central banks, usually on a collateralised basis, as well as foreign exchange and gold services. More recently, the Bank has been marketing actively asset management services, which constitute an area of significant potential. Several central bank portfolios are currently under BIS management.
If the Bank is to safeguard its position in the intermediation of central bank reserves, it will need to remain responsive to the changing needs of its customers. This will involve a continued emphasis on providing investment instruments with an attractive blend of yield, flexibility and security. This will also call for the exchange of technical know-how. Last but not least, the commitment to excellence will have to remain buttressed by the rigorous monitoring of credit exposures, liquidity, market and operational risks. In accordance with best practice, this is currently done by a separate risk control unit directly reporting to the Deputy General Manager, and through him to me.
Analytical and statistical contributions of the Bank
The second main area into which the Bank's energy and resources are channelled is the provision of analytical and statistical services. Two features of the Bank's activities in this domain deserve particular mention. The first one is the increasingly global character of participation in the meetings supported by the Bank. The other one, which I will comment on in a minute, is the thrust of the analysis done in support of international cooperation.
Whereas 15 years ago the meetings under the auspices of the BIS brought together the central banks of the most important industrial countries, today's meetings are almost uniformly marked by the geographical diversity of participants. In addition, the number of meetings taking place in all regions of the world has expanded greatly.
This broadening of representation can be witnessed during the regular bimonthly meetings of member central banks. It is also a feature of other meetings that the BIS organises. For instance, annual working parties on monetary policy are no longer held solely with central bank representatives of mature economies. Separate meetings are now organised for senior central bank officials from Africa, Asia, central and eastern Europe and Latin America. Another fertile area for global cooperation has proved to be the issue of central bank governance. Eight central bank Governors from a diversified group of countries steer a central bank governance network which now spans 40 central banks around the world. I should stress again that most of these efforts are not limited to BIS shareholders, but encompass other central banks as well, either through direct participation or, if that is not feasible, through the communication of the substance of the deliberations via a
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As an intermediator of central bank funds, the guiding principles of the Bank in serving its customers have always been liquidity, security, confidentiality and return. To achieve these goals, the Bank has applied a strategy of offering to central bank customers liquid instruments that provide a yield pickup over qualitatively comparable alternatives for central bank portfolio investments, and of rigorously monitoring and managing credit and market risk.
Within the framework of this strategy, the Bank witnessed an increase in its balance sheet over the past decade from just below USD 90 billion in the 1990/91 financial year to nearly USD 175 billion at the end of financial year 2001/02, with over USD 20 billion of this increase coming in the past year.
In terms of market share, the Bank intermediates about 6.5% of world international reserves, serving almost 120 central bank customers. The growth in Asian deposits has been especially buoyant. This region accounted for less than one quarter of total currency deposits at the end of 1998. Right now, the region claims a share of about 45%.
Medium-Term Instruments have been a major attraction for central bank funds in recent years. Created in late 1998 to accommodate customers' requests for longer-dated tradable instruments, purchases of MTIs grew to a record USD 48 billion at the end of 2001. However, expectations of rising interest rates in early 2002 led many central banks to shorten the duration of their portfolios, also at the BIS. As a result, the MTI book declined slightly.
In addition to intermediating central banks' reserves, the Bank is offering its customers a number of other financial services. These include short-term credits to central banks, usually on a collateralised basis, as well as foreign exchange and gold services. More recently, the Bank has been marketing actively asset management services, which constitute an area of significant potential. Several central bank portfolios are currently under BIS management.
If the Bank is to safeguard its position in the intermediation of central bank reserves, it will need to remain responsive to the changing needs of its customers. This will involve a continued emphasis on providing investment instruments with an attractive blend of yield, flexibility and security. This will also call for the exchange of technical know-how. Last but not least, the commitment to excellence will have to remain buttressed by the rigorous monitoring of credit exposures, liquidity, market and operational risks. In accordance with best practice, this is currently done by a separate risk control unit directly reporting to the Deputy General Manager, and through him to me.
Analytical and statistical contributions of the Bank
The second main area into which the Bank's energy and resources are channelled is the provision of analytical and statistical services. Two features of the Bank's activities in this domain deserve particular mention. The first one is the increasingly global character of participation in the meetings supported by the Bank. The other one, which I will comment on in a minute, is the thrust of the analysis done in support of international cooperation.
Whereas 15 years ago the meetings under the auspices of the BIS brought together the central banks of the most important industrial countries, today's meetings are almost uniformly marked by the geographical diversity of participants. In addition, the number of meetings taking place in all regions of the world has expanded greatly.
This broadening of representation can be witnessed during the regular bimonthly meetings of member central banks. It is also a feature of other meetings that the BIS organises. For instance, annual working parties on monetary policy are no longer held solely with central bank representatives of mature economies. Separate meetings are now organised for senior central bank officials from Africa, Asia, central and eastern Europe and Latin America. Another fertile area for global cooperation has proved to be the issue of central bank governance. Eight central bank Governors from a diversified group of countries steer a central bank governance network which now spans 40 central banks around the world. I should stress again that most of these efforts are not limited to BIS shareholders, but encompass other central banks as well, either through direct participation or, if that is not feasible, through the communication of the substance of the deliberations via a
E
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