Quasi-Fiscal Implications of Central Bank Crisis Interventions
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Summary:
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.
Series:
Working Paper No. 2023/114
Subject:
Central bank balance sheet Central bank operations Central Banks Financial statements Fiscal risks Public debt Public financial management (PFM)
Frequency:
regular
English
Publication Date:
June 2, 2023
ISBN/ISSN:
9798400241185/1018-5941
Stock No:
WPIEA2023114
Format:
Paper
Pages:
48
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