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Quasi-Fiscal Implications of Central Bank Crisis Interventions
Author:
John Hooley
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,
Mr. Ashraf Khan
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https://orcid.org/0000-0002-0084-0240
,
Claney Lattie
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Istvan Mak
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Ms. Natalia Salazar https://isni.org/isni/0000000404811396 International Monetary Fund

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,
Amanda Sayegh
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Mr. Peter Stella
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Series:
IMF Working Papers
Volume/Issue:
Volume 2023: Issue 114
Language:
English
Publication Date:
02 Jun 2023
DOI:
https://doi.org/10.5089/9798400241185.001
ISBN:
9798400241185
ISSN:
1018-5941
Pages:
48
Keywords:
Central bank; quasi-fiscal; fiscal risks; monetary policy; fiscal policy; sovereign debt management; policy coordination; support facilities; intervention announcement; asset purchase facility; liquidity-providing repo; variable interest entity; Central bank balance sheet; Central bank operations; Financial statements; Global
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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We develop a stylized balance sheet framework to help identify ‘quasi-fiscal’ components of central bank crisis interventions and show how sources of fiscal risk are created from both the new claims and how they are funded. Combining central bank balance sheet data with survey evidence from intervention announcements, we document the risks to the public sector balance sheet from central banks’ interventions in response to the Covid-19 crisis, including non-conventional lending to the financial and non-financial sectors and large-scale purchases of government securities. Case study analysis indicates that management of fiscal risks from central bank crisis interventions varies greatly across countries, although several good practices can be identified.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund