Building Trust in the Global Financial System
In the world of finance, trust is everything. But trust cannot exist without clear rules and reliable systems that allow banks, companies, and regulators to identify who is who. This is where global institutions like the Bank for International Settlements (BIS) and the Global Legal Entity Identifier Foundation (GLEIF) come in — and why the Legal Entity Identifier (LEI) is here to stay.
The LEI code
is not just another regulatory requirement. It is a key part of a global effort, driven by BIS and its network, to make financial markets safer, more transparent, and more efficient.
What is BIS and why does it matter?
The Bank for International Settlements (BIS) is often called the “bank for central banks.” Founded in 1930 and headquartered in Basel, Switzerland, BIS brings together 63 central banks — including the European Central Bank and the U.S. Federal Reserve — representing around 95% of the world’s GDP.
BIS does not serve individuals or companies directly. Instead, it sets the rules of the game for the global financial system. Under BIS, two powerful committees operate:
- CPMI (Committee on Payments and Market Infrastructures), which develops global standards for payments and settlement systems.
- The Basel Committee on Banking Supervision, which defines global banking standards (including the famous Basel I, II, and III frameworks).
In short: BIS is the “umbrella organization” that makes sure financial systems remain stable and secure across borders.
How GLEIF fits into the BIS ecosystem
In 2008, the global financial crisis exposed how difficult it was for regulators and market participants to track risks and understand connections between companies. One problem was simple but fundamental: nobody could reliably identify legal entities across different countries and databases.
To solve this, the Financial Stability Board (FSB) — an international body created under the guidance of BIS — proposed the creation of the Legal Entity Identifier (LEI).
GLEIF, the Global Legal Entity Identifier Foundation, was established in 2014 to manage the LEI system. Its mission is to make sure that every company worldwide can be uniquely identified with a 20-character code that works across borders, regulators, and systems.
So the connection is clear:
- BIS provides the vision and global coordination.
- FSB develops policies under BIS’s umbrella.
- GLEIF executes the technical solution — the LEI.
This makes the LEI not just a local initiative, but a central part of the global financial architecture.
LEI, SWIFT and the payments world
When we talk about trust in cross-border finance, we cannot ignore SWIFT, the global messaging network that powers most international bank transfers.
SWIFT provides the secure channel for sending payment instructions, but it needs reliable data on who is sending and receiving money. That’s where the LEI becomes essential: it gives every legal entity a unique global ID that regulators, banks, and counterparties can trust.
This is not theory — regulators around the world already require LEIs in many reporting frameworks, including:
- MiFID II / MiFIR in the EU,
- Dodd-Frank Act in the U.S.,
- and other local rules across Asia and beyond.
In practice, this means the LEI is becoming as fundamental to financial transactions as IBAN is to bank accounts.
What this means for companies and banks
For companies, having an LEI number is not just about checking a compliance box. It signals credibility, transparency, and readiness to operate in a global market. Financial institutions, regulators, and counterparties can instantly verify who you are, reducing delays, errors, and risks.
For banks, LEIs reduce operational complexity and strengthen KYC (Know Your Customer) processes. Instead of juggling multiple identifiers, they can rely on a single, global standard supported by BIS and GLEIF.
Looking ahead, the LEI may soon become part of everyday business life. As digital identity systems evolve — including the new verifiable LEI (vLEI) — companies could use their LEI in everything from opening a bank account to signing cross-border smart contracts.
Why the LEI is here to stay
The big picture is simple: the LEI is not a passing trend. It was born from the lessons of the financial crisis, developed under the guidance of BIS, and is managed globally by GLEIF. Its purpose is clear — to make financial markets more transparent, secure, and trustworthy.
In a world where money moves instantly across borders and risks spread faster than ever, global standards like the LEI are essential infrastructure. They are the invisible layer that holds the system together.
For businesses, that means the LEI is not just another code — it is your passport to global finance.