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What is the Bank of Banks?

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The State Bank of Pakistan controls all the banking system and looks after their activities. It also advances them loans in their difficult times. So State Bank is called the Bank of Banks.

The Bank for International Settlements (BIS) is an international financial institution[2] owned by central banks which "fosters international monetary and financial cooperation and serves as a bank for central banks".[3] The BIS carries out its work through its meetings, programmes and through the Basel Process – hosting international groups pursuing global financial stability and facilitating their interaction. It also provides banking services, but only to central banks and other international organizations. It is based in Basel, Switzerland, with representative offices in Hong Kong and Mexico City.


The BIS was established in 1930 by an intergovernmental agreement between Germany, Belgium, France, the United Kingdom, Italy, Japan, the United States, and Switzerland.[4][5] It opened its doors in Basel, Switzerland, on 17 May 1930.

The BIS was originally intended to facilitate reparations imposed on Germany by the Treaty of Versailles after World War I, and to act as the trustee for the German Government International Loan (Young Loan) that was floated in 1930.[6] The need to establish a dedicated institution for this purpose was suggested in 1929 by the Young Committee, and was agreed to in August of that year at a conference at The Hague. The charter for the bank was drafted at the International Bankers Conference at Baden-Baden in November, and adopted at a second Hague Conference on January 20, 1930. According to the charter, shares in the bank could be held by individuals and non-governmental entities. However, the rights of voting and representation at the Bank's General Meeting were to be exercised exclusively by the central banks of the countries in which shares had been issued. By agreement with Switzerland, the BIS had its corporate existence and headquarters there. It also enjoyed certain immunities in the contracting states (Brussels Protocol 1936).

The BIS’s original task of facilitating World War I reparation payments quickly became obsolete. Reparation payments were first suspended (Hoover moratorium, June 1931) and then abolished altogether (Lausanne Agreement, July 1932). Instead, the BIS focused on its second statutory task, i.e. fostering the cooperation between its member central banks. It acted as a meeting forum for central banks and provided banking facilities to them. For instance, in the late 1930s, the BIS was instrumental in helping continental European central banks shipping out part of their gold reserves to London and New York.[7] At the same time, the BIS fell under the spell of the appeasement illusion. The most notorious incident in this context was the transfer of 23 tons of gold held by the BIS in London on behalf of the Czechoslovakian national bank to the German Reichsbank after Nazi Germany occupied Czechoslovakia in March 1939.
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