I know that the BIS provides banking services to central banks exclusively, and that it is essentially a cooperative owned by central banks, however I am not sure why central banks would use the likes of BIS rather than their foreign reserve accounts at fellow central banks.
Crucially, I would like to understand the logic of why a central bank might park some of its foreign currency reserves with the BIS rather than with another central bank, and conversely, why a central bank might park some of its foreign currency reserves with another central bank rather than the BIS.
Presumably the primary function of the BIS is to help with the settlement process by transferring funds on behalf of their central bank clients.
I also understand that BIS helps central banks in times of liquidity crisis by offering to buy back tradeable securities from them in exchange for money.
Is the best way to understand the relationship between BIS and its central bank members to liken it to the relationship between a national central bank and the commercial banks operating in its country?
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