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THE CENTRAL BANK TRANSPARENCY CODE—FINDINGS OF THE PILOT REVIEWS
February 2023
IMF staff regularly produces papers proposing new IMF policies, exploring options for reform, or reviewing existing IMF policies and operations. The following document(s) have been released and are included in this package:
The Policy Paper prepared by IMF staff and completed on February 3, 2023.
Informal Session to Brief:
The report prepared by IMF staff and presented to the Executive Board in an informal session on February 15, 2023. Such informal sessions are used to brief Executive Directors on policy issues. No decisions are taken at these informal sessions. The views expressed in this paper are those of the IMF staff and do not necessarily represent the views of the IMF's Executive Board.
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© 2023 International Monetary Fund
Press Release
PRESS RELEASE
PR23/72
IMF Executive Board Discusses the Outcomes of Central Bank Transparency Code Pilot Reviews
FOR IMMEDIATE RELEASE
Washington, DC –March 15, 2023: On February 15, 2023, the Executive Board of the International Monetary Fund (IMF) discussed a policy paper 'The Central Bank Transparency Code-Findings of the Pilot Reviews' that provides an overview of the Central Bank Transparency Code (CBT) pilot reviews. The CBT is a comprehensive set of transparency principles and practices that apply to all central banks, regardless of their mandates, governance frameworks, and institutional arrangements. Following the Board's adoption of the Code in 2020, staff conducted seven pilot reviews on a diverse set of central banks, operating in different economic, financial, and institutional development environments, and reflecting different levels of income, exchange rate regime, and geographies.
The pilot reviews documented transparency practices across all key aspects of central banking and highlighted the areas for improvement. The CBT reviews' recommendations received strong traction from the participating central banks. A survey of the participating central banks, conducted following each CBT review, confirmed that all CBT pilots were viewed as very beneficial, confirming staff's view of the efficacy and success of the CBT. The pilot CBT reviews helped to facilitate work in other IMF workstreams, notably the Financial Sector Assessment Program (FSAP), Article IV consultations, and Technical Assistance.
The pilot reviews have shown that the CBT review can be an effective tool in support of central bank independence by enhancing their overall transparency and accountability. Based on the successful experience of pilot CBT reviews and continued interest from central banks, the staff will continue to conduct these reviews and establish a repository of transparency practices documented during the review process. 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.
Executive Board Assessment:
Executive Directors welcomed the update on the implementation of CBT reviews and appreciated the strong traction and positive feedback expressed by the participating central banks. They stressed that the CBT should retain its voluntary nature and continue to strike the right balance between transparency and confidentiality in a manner that is commensurate with country-specific circumstances, including legal and regulatory frameworks. This balance is vital in the sensitive policy areas such as foreign exchange management, financial integrity, and emergency liquidity assistance.
Directors emphasized the need to ensure proper prioritization of Fund membership while leveraging synergies with other Fund workstreams. They called for prioritizing middle-income countries' and low-income countries' central banks with significant room for improvement in transparency practices, but also were open to incorporating countries at an advanced stage of transparency practices to facilitate peer learning.
Directors broadly agreed that comprehensive CBT reviews across the five pillars should be carried out for better efficacy and optimal use of resources; nonetheless, they saw merit in conducting a modular approach to meet country-specific needs, especially where resources and capacity are constrained.
Directors supported staff's proposal to continue to offer CBT reviews to the IMF membership as a voluntary tool to enhance central bank transparency and facilitate accountability. They suggested an annual interim update on CBT review findings to keep the Board apprised of evolving central bank transparency practices.
Title Page
THE CENTRAL BANK TRANSPARENCY CODE—FINDINGS OF THE PILOT REVIEWS
February 3, 2023
EXECUTIVE SUMMARY
This paper reports to the Executive Board on the outcomes of the Central Bank Transparency Code (CBT) pilot reviews. The CBT is a comprehensive set of transparency principles and practices that apply to all central banks, regardless of their mandates, governance frameworks, and institutional arrangements. Following the Board's adoption of the Code in 2020, staff conducted seven pilot reviews on a diverse set of central banks, operating in different economic, financial, and institutional development environments, and reflecting different levels of income, exchange rate regime, and geographies.
The pilot CBT reviews helped central banks evaluate their transparency practices and strengthen dialogue with external stakeholders. The pilot reviews documented transparency practices across all key aspects of central banking and highlighted the areas for improvement. The CBT reviews' recommendations received strong traction from the participating central banks. A survey, conducted following each CBT review, confirmed that all CBT pilots were viewed as very beneficial, confirming staff's view of the efficacy and success of the CBT. In all reviews, the balance between transparency and central banks' legitimate need for confidentiality was clearly maintained and acknowledged. Additionally, the pilot CBT reviews helped to facilitate work in other IMF workstreams, notably Financial Sector Assessment Program, Article IV consultations, and Technical Assistance.
The CBT pilots provided valuable information on the resources required for the reviews going forward. CBT review process could be streamlined further based on the updated CBT Guidance Note. Early engagement with the management and staff of the central bank, particularly on the self-assessment, would help to save on resource costs for both sides.
Staff will continue to offer CBT reviews to the rest of the membership. The pilot reviews have shown that the CBT review can be an effective tool in support of central bank independence by enhancing their overall transparency and accountability. Based on the successful experience of pilot CBT reviews and continued interest from central banks, the staff will continue to conduct these reviews and establish a repository of transparency practices documented during the review process. This will require consideration of additional Fund resources to be supplemented with donor funding particularly for low-income countries (LICs).
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.
Approved By
Tobias Adrian
Prepared by team led by Jihad Alwazir (Monetary and Capital Markets Department) that included Elie Chamoun (Finance Department), Chady El Khoury (Legal Department), Ashraf Khan (Monetary and Capital Markets Department), Dmytro Solohub (Monetary and Capital Markets Department), Hans Weenink (Legal Department), and Julie Vaselopulos (Monetary and Capital Markets Department, production assistance).
Contents
Glossary
INTRODUCTION
OVERVIEW OF THE CENTRAL BANK TRANSPARENCY CODE AND PILOT REVIEWS
CBT REVIEWS: KEY TAKEAWAYS FROM PILOTS
A. Pillar I. Transparency in Governance
B. Pillars II, III, and IV. Transparency in Policies, Operations, and Outcome
C. Pillar V. Transparency in Official Relations
CONCLUSION AND NEXT STEPS
BOX
1. Central Bank Transparency Practices on Emergency Measures and Newly Emerged Roles and Responsibilities
FIGURE
1. Central Bank Transparency—Pilot Results
TABLE
1. Overview of CBT Pilot Reviews
APPENDICES
I. Key Takeaways from Each Pilot Review
II. CBT Review Questionnaire
Glossary
| AML/CFT | Anti-Money Laundering and Countering the Financing of Terrorism |
| BAM | Bank Al-Maghrib |
| BCU | Central Bank of Uruguay |
| BOC | Bank of Canada |
| BOU | Bank of Uganda |
| CBC | Central Bank of Chile |
| CBS | Central Bank of Seychelles |
| CBT | Central Bank Transparency Code |
| DRR | Detailed Review Report |
| ELA | Emerging Liquidity Assistance |
| FSAP | Financial Sector Assessment Program |
| FX | Foreign Exchange |
| IMF | International Monetary Fund |
| IT | Inflation Targeting |
| MCM | IMF Monetary and Capital Markets Department |
| NBRNM | National Bank of the Republic of North Macedonia |
| TA | Technical Assistance |
