[5][6] 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.

[7]: 69 At the Brussels Conference in 1892, German academic Julius Wolff submitted a blueprint for an international currency that would be used for emergency lending to national central banks and would be issued by an institution based in a neutral country.

[9]: 17 In the war's immediate aftermath, Dutch central banker Gerard Vissering advocated an international currency without reliance of a common gold pool.

[9]: 22  Similar ideas burgeoned at the Brussels Conference of 1920, the first major discussion of international financial challenges following the war, endorsed by luminaries such as Belgian prime minister Léon Delacroix and American banker Frank A. Vanderlip, who suggested reorganizing Europe's national central banks along similar lines as the U.S. Federal Reserve which he had helped establish in the previous decade.

At the Genoa Conference of 1922, following advocacy by several experts that included Ralph Hawtrey, Robert Horne and John Maynard Keynes, a resolution was passed that recommended the creation of "an association or permanent understanding for cooperation amongst central banks, not necessarily limited to Europe, to coordinate credit policies, without detriment to the freedom of each individual central bank.

[9]: 36  Young asked his American peers Warren Randolph Burgess, Shepard Morgan and Walter W. Stewart to sail promptly to Paris, and on 7 March 1929 they presented a compromise text that formed the basis for subsequent developments.

Such a role was advocated by Schacht but opposed by France and by commercial bankers, on the grounds that it could be inflationary and create unfair competition to private-sector lenders.

[9]: 38 Political positions within the Herbert Hoover administration made it impossible for U.S. Federal Reserve System officials to be formally involved in the initiative, but the U.S. was still able to retain major influence in the proceedings because of a shared perception amongst negotiators that the project would fail without U.S. participation.

The bank's Charter, Statutes, Trust Agreement, and Convention on its relations with the host country were subsequently drafted by a special Organisation Committee chaired by Jackson Reynolds, president of the First National Bank of New York,[9]: 47  which met in the discreet location of Hôtel Stéphanie (part of which later became Brenners Park-Hotel & Spa [de]) at Baden-Baden from 3 October to 13 November 1929; the intense work was marred by the death of Delacroix from a heart attack during the proceedings.

[11]: 616-618 As in the Paris discussions earlier in the year, the Baden-Baden committee had to reconcile the different visions for the future BIS, from purely a creation of central banks (as espoused by Italy's Alberto Beneduce and by Montagu Norman) to a supranational development bank with policy tasks such as developing world trade (as advocated by Schacht and UK Chancellor Philip Snowden).

[9]: 40-44  The founding texts of the BIS were then approved at the second part of the Hague conference, on 20 January 1930, with only minor changes from the Baden-Baden drafts such as the addition of English to French as official language.

[9]: 41  These texts included the constituent Charter and Statutes for the bank, and a Convention (intergovernmental agreement) between Germany, Belgium, France, the United Kingdom, Italy, Japan, the United States, and Switzerland, establishing the bank's special status on Swiss soil and committing Switzerland to grant the Charter and approve the Statutes.

At the same time, the BIS possessed de facto international legal personality, was exempted from Swiss taxation and banking supervision, and its senior management enjoyed diplomatic status.

In principle the Board could appoint up to nine additional directors, in practice however only the Dutch, Swedish and Swiss central bank governors in the BIS's first decades.

[9]: 49-50  The inaugural BIS Board had 16 members: Franck and Francqui (Belgium); Moreau, Georges Brincard [fr] and Melchior de Vogüé [fr] (France); Hans Luther, Carl Melchior and Paul Reusch [de] (Germany); Stringher and Beneduce (Italy); Tanaka and Daisuke Nohara (Japan); Norman and Addis (UK); and Gates McGarrah and Fraser (United States).

By mid-April, Fraser had arrived from the United States and was working on the BIS's behalf from the Paris office of the Agent General for Reparation Payments, joined by McGarrah in April.

[9]: 62-63 Reparation payments were first suspended for one year (Hoover moratorium, June 1931) and then stopped altogether after the Lausanne Agreement of July 1932 failed to be ratified.

For instance, in the late 1930s, the BIS was instrumental in helping continental European central banks ship out part of their gold reserves to London.

[16] As a purportedly apolitical organization, the BIS was unable to prevent transactions that reflected contemporaneous geopolitical realities, but were also widely regarded as unconscionable.

Also, throughout the war, the Allies accused the Nazis of looting and pleaded with the BIS not to accept gold from the Reichsbank in payment for prewar obligations linked to the Young Plan.

Between 1933 and 1945 the BIS Board of directors included Walther Funk, a prominent Nazi official, and Emil Puhl responsible for processing dental gold looted from concentration camp victims, as well as Hermann Schmitz, the director of IG Farben, and Baron von Schroeder, the owner of the J. H. Stein Bank [de], all of whom were later convicted of war crimes or crimes against humanity.

The liquidation of the bank was supported by other European delegates, as well as Americans (including Harry Dexter White and Secretary of the Treasury Henry Morgenthau Jr.).

According to an announcement made by the Swiss Government on 26 December 1952, Japan renounced all rights, titles and interests in the BIS it had acquired under the Hague Convention of January 1930.

It coordinated the central banks' Gold Pool[9]: 416  and a number of currency support operations (e.g. Sterling Group Arrangements of 1966 and 1968)[citation needed].

This was opposed by locals and their representation in the Swiss Heritage Society, which led to a public referendum in 1971 in which 69% of voters endorsed a revised design with reduced height.

In 1993, when the Committee of Governors was replaced by the European Monetary Institute (EMI – the precursor of the ECB), it moved from Basel to Frankfurt, cutting its ties with the BIS.

While monetary policy is determined by most sovereign nations, it is subject to central and private banking scrutiny and potentially to speculation that affects foreign exchange rates and especially the fate of export economies.

Reserve policy is harder to standardize, as it depends on local conditions and is often fine-tuned to make industry-specific or region-specific changes, especially within large developing nations.

The PBoC is thus unusual in acting as a national bank focused on the country and not on the currency, but its desire to control asset inflation is increasingly shared among BIS members who fear "bubbles", and among exporting countries that find it difficult to manage the diverse requirements of the domestic economy, especially rural agriculture, and an export economy, especially in manufactured goods.

As of August 2024:[40] Strong criticisms of the financial institution have been made by Dutch economist and author Ronald Bernard, who argues that numerous transactions bordering on ethics and legality have been passed through the BIS since its founding (beginning with the business dealings that the British and Americans allegedly had with the Germans during World War II, particularly in connection with the sale of gold seized by the Nazis from German Jews) and continue to take place smoothly to this day: "Everything that could not stand the light of day, passed through it, by a devious means".