Front Matter

Front Matter

George Mackenzie, and Peter Stella
Published Date:
October 1996
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© 1996 International Monetary Fund

Library of Congress Cataloging-in-Publication Data

Mackenzie, G.A. (George A.), 1950–

Quasi-fiscal operations of public financial institutions / G.A. Mackenzie and Peter Stella.

p. cm. — (Occasional paper: 142)

Includes bibliographic references.

ISBN 1-55775-583-3

1. Budget deficits. 2. Fiscal policy. 3. Banks and banking, Central. 4. Government financial institutions. I. Stella, Peter, 1957–. II. International Monetary Fund. III. Title. IV. Series: Occasional paper (International Monetary Fund): no. 142.

HJ2005.M217 1996




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The following symbols have been used throughout this paper:

… to indicate that data are not available;

— to indicate that the figure is zero or less than half the final digit shown, or that the item does not exist;

- between years or months (for example, 1991-92 or January-June) to indicate the years or months covered, including the beginning and ending years or months:

/ between years (for example, 1991/92) to indicate a crop or fiscal (financial) year.

“Billion” means a thousand million.

Minor discrepancies between constituent figures and totals are due to rounding.

The term “country,” as used in this paper, does not in all cases refer to a territorial entity that is a state as understood by international law and practice; the term also covers some territorial entities that are not states, but for which statistical data are maintained and provided internationally on a separate and independent basis.



Certificate of deposit


East Caribbean Currency Union


European currency unit


First in, first out (inventory accounting term)


Local currency unit


London interbank offered rate


Multiple exchange rate


National Bank of Poland


National Bank of Romania


National Bank of [former] Yugoslavia


Net foreign assets


Nonfinancial public sector enterprise


Nonfinancial public sector


Other items net


Public financial institution


Quasi-fiscal operation or activity


Central banks and other public financial institutions often carry out operations that are fiscal in all but name. Despite their potential macroeconomic and financial significance, these “quasi-fiscal” operations or activities have not received a great deal of attention from economists. This Occasional Paper aims to fill this gap by providing a comprehensive analysis of the macroeconomic and financial aspects of quasi-fiscal activity. It examines problems related to the measurement and allocative impact of such operations, the implications of their exclusion from conventional budgets, and possible policy responses.

The paper is a revised version of a paper prepared for a seminar in the Executive Board of the IMF in May 1995.

The authors are indebted to numerous colleagues throughout the IMF—particularly those who reviewed the individual country experience discussed in the paper. They wish especially to thank Peter Heller, George Kopits, Vito Tanzi, and Manuel Guitián for guidance and support. Thanks are also due to Rifaat Basanti, Ales Bulir, Gustavo Cañonero, John Dalton, Jorge Guzman, Juha Kahkonen, Claire Liuksila, David Marston, Caryl McNeilly, Reza Moghadam, Robert Rennhack, Gerd Schwartz, and Gopal Yadav for useful suggestions; Chris Wu and Scott Anderson for research assistance; and Ahwerah Vichailak, Randa Sab, and Pearl Acquaah for secretarial assistance. Jim McEuen of the External Relations Department edited the paper for publication and coordinated production.

The opinions expressed in the paper are those of the authors and should not be construed as representing the views of the IMF or of its Executive Directors.

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