Not long ago, the Swiss Bank of International Settlements took a beating for its despicable funding of the Nazis. But these days, with reliable data about global markets harder to come by, bankers are finding its 'neutral sentinel' role to be a crucial one.

Six decades ago, the U.S. Treasury wanted to shut down the Bank for International Settlements, saying it helped finance the Nazis. Today, Jean-Claude Trichet and Ben S. Bernanke are transforming the organization into one of the world's most powerful networking clubs. With hedge funds and private equity firms pumping record sums of money around the world economy, central bankers fret that investors are taking on too much risk. As a result, the bankers are increasingly turning to the Basel, Switzerland-based BIS, the oldest international financial institution, for research and advice, and to coordinate damage-control plans.

The bank's most important role may be in providing a venue for swapping information and ideas among those charged with maintaining the stability of the global economy. ``If the BIS didn't exist we'd have to invent it,'' said Laurence Meyer, 63, vice chairman of Macroeconomic Advisers LLC in St. Louis and a former U.S. Federal Reserve governor.

The ``central banks' central bank'' now performs many of the functions of a monetary authority, churning out research on everything from derivatives to inflation-targeting. It also holds about 6 percent of central banks' currency reserves on their behalf.

(Continue reading this story on Bloomberg)

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