BASEL, Switzerland – The Basel Accords have brought the Bank of International Settlements (BIS) to the attention of United States credit unions. Credit unions in 100 countries are affected. The World Council of Credit Unions worked with BIS to make sure credit union interests were relayed during the writing of The Accords. For many credit unions not dealing internationally The Accords were the first time they had heard of BIS, which was formed in May 1930 and is the oldest international financial organization in existence. It services central banks and international organizations. The U.S. is represented by the Board of Governors of the Federal Reserve System and the Federal Reserve Bank of New York. BIS has several functions including acting as a forum for central banks, as a counterparty in financial transactions, and as an agent in international financial operations. It also provides economic and monetary research and its many papers and reports are available on its Web site It also performs regular banking services such as gold and currency exchanges. During times of financial crisis it provides special support credits as in 1964 when their help bolstered the Italian Lira in 1964. They also participated in the IMF stabilization programs for Mexico in 1982 and Brazil in 1988. Established in May 1930, as part of the Young Plan on reparation payments from Germany under the Versailles Treaty of WWI, BIS is the world's oldest international financial organization Its responsibilities changed as needs changed and were identified by the central banks that met regularly in Basel to deal with financial stability issues in the banking sector. After WWII BIS concentrated on the implementation of the Bretton Woods System and the management of cross-border capital flows and international debt. Economic crisises in the 1970s lead to the writing of the 1988 Basel Capital Accord, a capital measurement system. A revised Basel II will be ready for implementation in 2006. Originally The Accords were for financially prudent standards in banking for G-10 countries but their influence has expanded to cover 10 times that number of countries. Besides capital management they deal with supervisory management and risk factors. Their work is not legally binding. It is up to the different participating countries to adopt the standards. The Basel Committee meets four times each year and had around 25 working groups. Belgium, Canada, France, Germany, Italy, Japan, Luxembourg, the Netherlands, Spain, Sweden, Switzerland, United Kingdom and United States are represented by their central banks. There are 12 members of the BIS Committee's Secretariat, a group of professional supervisors provided on a temporary basis from the various central banks. BIS has stated in its documents, "Financial stability is crucial for sustained economic growth and can not be achieved without strong financial systems. Weak financial systems can destabilise local economies, making them more vulnerable to external shocks, and may threaten global financial markets. Effective financial sector supervision promotes stability by ensuring that financial institutions operate in a safe and sound manner. Financial institutions must have adequate risk management policies and procedures and operate with sufficient levels of capital." [email protected]

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