Bank for International Settlements (BIS)
The Bank for International Settlements (BIS) is a global company created to bring cooperation between major central banks which are from its board of directors, and its shareholders (KENTON, 2019). BIS also operates as a bank for the central banks. The Bank for International Settlements is the oldest universal financial organization. BIS started back in 1930 as a joint stock company, which used to offer financial management services to the Young Plan.
Central banks are the only organization which can hold BIS’ capital. BIS divides the forex exchange market into three major categories reporting dealers, other financial institutions, and non-financial institutions (KENTON, 2019). BIS acts as a host for secretariats of different independent organizations such as the Financial Stability Board, The universal Association of Insurance Supervisors, and the International Association of Deposit Insurers (Cohen, 2018). BIS also provides an opportunity to promote conversation among central banks, acts as a counterparty for central banks in their financial transactions, acts as a Centre for economic and financial research, and acts as an agent in connection with international financial processes. BIS usually hosts different committees and independent organizations which table ahead recommendations to governments on global business regulations.
Reporting Dealers
A reporting dealer also known as money Centre banks is a financial organization that takes part in the secondary market and participates in both local, and international foreign exchange. Reporting Dealers participate in buying, and selling of currencies (Hogan & Pearce, 2017). Reporting dealers also OTC derivatives for both their account and meet the demands of the customer. Reporting dealers always use electronic platforms, like the EBS. Reporting dealers also entail affiliates of organizations operating in different locations that have auctions counter but not trading a desk, which conducts business with big customers. Reporting dealers are big commercial, and investment banks, and security houses that take part in the inter-dealer bazaar, and have business with big customers such as big corporate firms, governments, and other non-reporting financial organizations.
Other Institutions
Other institutions are those institutions that are not categorized as reporting dealers (Hogan & Pearce, 2017). The term non-financial cover the rest financial institutions, for example, lesser commercial banks, investment banks, security houses, also besides pension money, hedge funds, money market funds, currency funds, building societies, charter companies, insurance institutions, financial subsidiaries of corporate businesses, and central banks.
Non-Financial Customers
Non-financial institutions include credit card companies, finance companies. Non-financial institutions also include financial services like payday creditors, rent-to-own business, check-cashing openings, brokerage companies, and credit card companies.
Conclusion
In conclusion, The Bank for International Settlements (BIS) being a global company has central banks as its capital holder. BIS divides the forex exchange market into three major categories; a reporting dealers, other financial institutions, and non-financial institutions. A reporting dealer is a financial organization that takes part in the secondary market and participates in both local, and international foreign exchange, other institutions are those institutions that are not categorized as reporting dealers, while Non-financial institutions include credit card companies, finance companies.
References
Cohen, B. J. (2018). The geography of money. Cornell University Press.
Hogan, W. P., & Pearce, I. F. (2017). The incredible Eurodollar: or why the world’s money system is collapsing. Routledge
KENTON, W. (2019). Politics and money. Retrieved from investopedia: https://www.investopedia.com/terms/b/bis.asp