This paper reports to the Executive Board on the outcomes of the Central Bank Transparency Code (CBT) pilot reviews. The pilot CBT reviews helped central banks evaluate their transparency practices and strengthen dialogue with external stakeholders. The CBT pilots provided valuable information on the resources required for the reviews going forward. Staff will continue to offer CBT reviews to the rest of the membership. The staff will report back to the Board in FY2026 on the progress of the CBT reviews and an update to the Code following five years of implementation.
Abstract
Central banks and other public financial institutions act as agents of fiscal policy in many countries. Their "quasi-fiscal" operations and activities can affect the overall public sector balance without affecting the budget deficit as conventionally measured, may also have important allocative effects, and increase the effective size of the public sector. This paper analyzes the macroeconomic and financial effects of such quasi-fiscal activities, as well as the taxes, subsidies, and other expenditures that such activities introduce outside the budget. Measurement and accounting issues are addressed, and policy recommendations are offered.
Abstract
Central banks and other public financial institutions (PFIs) play an important role as agents of fiscal policy in many IMF member countries. Their activities in this guise can affect the overall public sector balance (the balance of both the nonfinancial and the financial public sectors), without affecting the budget deficit as conventionally measured. These activities, which are often referred to as quasi-fiscal operations or activities (QFAs), may also have important allocative effects.1 Moreover, they entail an increase in the effective role and size of the public sector.
Abstract
In many countries, some of the activities in which central banks and PFIs engage, as well as some of the regulatory requirements of central banks, can be said to take on a fiscal character. These quasi-fiscal actions could, in principle, be duplicated by specific budgetary measures in the form of an explicit tax, subsidy, or other direct expenditure.6 Such activities, operations, and regulations are often used by governments to carry out specific budgetary or fiscal objectives outside the budget, and often in ways that are not transparent. Table 1 gives a sense of the range of QFAs in which central banks and other PFIs engage.
Abstract
The quasi-fiscal activities of a central bank stem from its roles as regulator of the exchange system and regulator of the financial system. The QFA of other PFIs takes the form of interventions in the financial markets.
Abstract
When quasi-fiscal activity is prevalent, the conventional measures of fiscal activity, such as the NFPS borrowing requirement or the deficit of the central government, are misleading indicators of the stance of fiscal policy and of the demands the government makes on credit availability.