BIS Forex Guide 2025: Understanding the Global Market's Ultimate Authority

The Unseen Force

The global foreign exchange market is huge. Daily trading volumes reach an amazing $7.5 trillion.

In this vast, spread-out sea of money, one organization stands as the central guide: the Bank for International Settlements (BIS). While banks, hedge funds, and companies make trades, the BIS provides the key framework of data and teamwork that supports it all. It is the top authority on the size, scope, and health of the global FX market.

This guide explains what the BIS is. It shows its exact link to the forex market and why its research matters to everyone from central bankers to small traders.

What Is The BIS？

The Central Banks' Bank

The Bank for International Settlements is a special international financial group. It is owned and run by the world's central banks, such as the U.S. Federal Reserve, the European Central Bank, and the Bank of England.

It does not serve regular people or businesses. Its clients are the money authorities themselves, making it truly the "bank for central banks."

Core Mission and Functions

The BIS has a clear, four-part job that is key for global money stability.

• Fostering international monetary and financial cooperation.
• Serving as a bank for central banks.
• Acting as a center for economic research and analysis.
• Promoting financial stability globally.

A Pillar of Finance

Established in 1930, the BIS is the world's oldest international financial institution. Its trust level is unmatched. Its 63 member central banks stand for countries that make up about 95% of the world's GDP, giving it a full and trusted view of the global money system.

The BIS's Crucial Role in Forex

Global FX Data Authority

The most visible and vital role the BIS plays in the forex market is that of the main data authority. It does not trade or set exchange rates. Instead, it measures and studies the market with deep insight, bringing clarity to an otherwise hidden, over-the-counter (OTC) system.

Key Forex Responsibilities

The BIS handles several key tasks that directly impact the forex market's structure and honesty.

• Data Collection & Reporting: Its main report, the BIS Triennial Central Bank Survey, is the top standard for FX market knowledge, giving the most reliable figures on market size, currency pairs, and trading tools.
• Fostering Cooperation: The BIS serves as a hub for key groups, including the Global Foreign Exchange Committee (GFXC) and the Committee on Payments and Market Infrastructures (CPMI), which set standards and best practices.
• Providing In-Depth Analysis: Through regular reports like its Quarterly Reviews and Bulletins, the BIS explains market trends, spots new risks, and informs policy talks on topics from fast trading to payment risk.
• Promoting Market Integrity: The BIS actively supports and promotes following the FX Global Code, a set of principles for good practice that aims to ensure a strong, fair, and clear foreign exchange market.

Guide, Not Global Regulator

It is important to understand that the BIS is not a global rule-maker. It has no legal power to enforce rules or punish market players. Instead, it sets standards, provides trusted data, and builds teamwork, guiding central banks and market members toward greater stability.

Deep Dive: The Triennial Survey

What is the Triennial Survey？

Every three years, the BIS leads the most complete survey of the foreign exchange and OTC markets. This isn't a guess or a model; it's a direct survey of the world's most active financial groups, making it the definitive count of the global FX market.

Latest Findings (2022)

The 2022 Triennial Survey showed key insights into the modern forex market's structure. Understanding these numbers is basic to understanding the market itself.

How the Survey Works

The survey's authority comes from its careful method. The BIS works with central banks in over 50 areas. These central banks, in turn, collect standard data from nearly 1,200 banks and financial groups.

This global, team effort ensures the data is complete, consistent, and free from the double-counting that would otherwise plague such a vast OTC market.

Using BIS Forex Data

For the Retail Trader

As market pros, we don't use BIS data for daily trading signals. We use it for key strategic context.

Knowing that 88% of all trades involve the US Dollar shows why major pairs like EUR/USD and USD/JPY have such deep liquidity and tight spreads. It explains why US economic data has such a big impact on the entire market.

Seeing the huge growth in FX swaps shows the hidden system of institutional funding, which can become a source of system-wide stress. This data helps in:

• Confirming currency pair liquidity: Focusing on major and minor pairs over exotic ones.
• Understanding institutional dominance: Seeing that the retail market is a small part of the whole.
• Identifying long-term trends: Tracking the slow but steady rise of currencies like the Chinese Renminbi in global rankings.

For the Corporate Treasurer

A corporate treasurer at a big firm uses BIS data to improve risk management. By studying the survey's breakdown of trading tools (e.g., forwards vs. swaps vs. options), they can design more effective and cost-saving currency hedging plans that match how the broader market works.

For Analysts and Policymakers

Financial analysts and central bank staff use BIS data as a main tool for watching system risk. By tracking the growth, focus, and makeup of the OTC market, they can spot potential bubbles or stress points long before they become a full crisis. This study work is exactly what led to a major finding in 2022.

Case Study: The Hidden FX Swap Market

A Shocking Discovery

In late 2022, the BIS shared research that sent a shock through the financial world. It revealed over $80 trillion in "hidden" off-books dollar debt held by non-bank financial groups outside the United States. This debt was created almost entirely through the use of FX swaps.

What Are FX Swaps？

An FX swap is a simple idea that can create complex risks. Basically, it is a deal where two parties exchange currencies for a set time and agree to swap them back at a pre-agreed rate in the future.

Imagine a European pension fund that needs US dollars to buy American assets. It can enter an FX swap:

• The fund gives a bank a main amount of euros.
• The bank gives the fund an equal amount of US dollars.
• They agree to reverse the deal in, for example, three months.

This creates a short-term dollar debt for the fund. The problem the BIS found was that these debts often don't show up on a firm's main books, making them effectively "hidden" from standard risk checks.

The "Dollar Scramble" Risk

This massive, hidden pool of dollar debt creates a big weakness. If money markets become stressed (as they did in March 2020), all of these groups may struggle to roll over their FX swaps at the same time. This could trigger a sudden, huge "scramble for dollars" that central banks would be forced to contain, possibly shaking the entire global money system.

Only through its unique data collection and study was the BIS able to spot and measure this risk.

Conclusion: Enduring Importance

The Bank for International Settlements is far more than a bank. It is the essential data authority and stability anchor for the global BIS forex market.

Its main contribution, the Triennial Survey, provides unmatched clarity into the world's largest financial market, turning hidden activity into measurable data.

As we look toward the next survey in 2025, the BIS is already focused on future challenges, including the effects of Central Bank Digital Currencies (CBDCs) and improving cross-border payment systems through projects like Project Nexus.

To truly understand the foreign exchange market—its scale, its structure, and its hidden risks—one must first understand the vital role of the BIS.