Guide to Analysing Companies

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BANKER’S ACCEPTANCE
01 Essential Finance 10/11/06 2:21 PM Page 40

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Bank for International Settlements
A central bank for central bankers, based in Switzerland. It
is a meeting place, a multinational regulatory authority and a
clearing house for many countries’ reserves. The Bank for
International Settlements (bis) was set up in 1930 as a private
company owned by a number of central banks, one commercial
bank (Citibank) and some private individuals. The bis’s head-
quarters are in Basel, where its main dealing room is situated,
and it has an office in Hong Kong covering Asia and Australasia.
In a throwback to the days of its incorporation, the bank uses
quaintly named gold francs as a unit of account but otherwise
keeps abreast of the times. In the international debt crisis of the
early 1980s, the bis played a vital role in supplying short-
term bridging loans that gave dollar-less developing countries
time to adjust their economic policies. In the late 1980s, it played
a less conspicuous role in setting up an international safety net
for rapidly deregulating financial markets.
Bank insurance fund
See federal deposit insurance corporation.
Bank of England
The UK’s central bank, affectionately known as the Old
Lady of Threadneedle Street in the City of London. The nick-
name comes from a drawing by James Gillray, an 18th-
century cartoonist. It depicts William Pitt the Younger, the
prime minister of the day, trying to steal the bank’s gold from
a chest which is being firmly sat upon by an old lady. The
Bank of England still holds gold and remains chief custo-
dian of the country’s currency.
Since 1997, the bank’s operations have been independent of
the government. Its Monetary Policy Committee judges what
level of rates of interest will best ensure that the economy
meets a target for inflation set by the government. The bank