Nine central banks have joined the Committee on Payment and Settlement Systems to raise its numbers to 23 members, the Bank for International Settlements (BIS) announced Friday. The grouping is a forum to monitor and analyze developments in domestic payment, clearing and settlement systems as well as in cross-border and multi-currency settlement schemes, according to the Basel, Switzerland-based BIS, which hosts the committee secretariat. The new central banks to join are: Australia, Brazil, China, India, Mexico, Russia, Saudi Arabia, South Africa and South Korea. They join the existing membership, which consists of: Belgium, Canada, the European Central Bank, France, Germany, Hong Kong, Italy, Japan, the Netherlands, Singapore, Sweden, Switzerland, Britain and the United States. The expansion would help contribute to financial stability through improvements to the global payments and settlement infrastructure, the BIS said in a statement. “The expansion will also help the committee keep oversight practices and standards in line with market developments and with increasing interdependencies among financial market infrastructures,” the statement said. The chairman of the committee is William Dudley, president of the Federal Reserve Bank of New York. THE BIS was originally established in May 1930 by bankers and diplomats of Europe and the United States to collect and disburse Germany's World War I reparation payments (hence its name). It was truly an extraordinary arrangement. Although the BIS was organized as a commercial bank with publicly held shares, its immunity from government interference - and taxes in both peace and war was guaranteed by an international treaty signed in The Hague in 1930. Although all its depositors are central banks, the BIS has made a profit on every transaction. And because it has been highly profitable, it has required no subsidy or aid from any government. Since it also provided, in Basel, a safe and convenient repository for the gold holdings of the European central banks, it quickly evolved into the bank for central banks.
