## EXECUTIVE SUMMARY

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---

### Overview of the Central Bank Transparency Code (CBT) and Pilot Reviews
- CBT is a five-pillar framework covering central banks’ transparency in: (i) governance; (ii) policies; (iii) operations; (iv) outcome; and (v) official relations.
- CBT pilot reviews were conducted between March 2021 and August 2022.
- Seven pilot CBT reviews were completed in 2021–22.
- CBT Guidance Note supports implementation and provides practical suggestions for reviewers, including dimensions of transparency: means, timeliness, periodicity, and quality of disclosure.
- CBT Detailed Review Report (DRR) is the main output of each review; each DRR includes the central bank’s response and intended steps to improve transparency.

### Pilot Review Coverage (summary)
- Seven central banks reviewed, representing different regions, income classifications, and exchange rate arrangements. Selected mission/report timing:
  - Canada — Date of Mission: May-2022 — Report Publication Date: September-2022
  - Chile — Date of Mission: March-2021 — Report Publication Date: June-2021
  - Morocco — Date of Mission: April-2022 — Report Publication Date: December-2022
  - Republic of North Macedonia — Date of Mission: May-June-2021 — Report Publication Date: January-2022
  - Seychelles — Date of Mission: June-July-2022 — Report Publication Date: September-2022
  - Uganda — Date of Mission: April-2022 — Report Publication Date: (in progress)
  - Uruguay — Date of Mission: September-2021 — Report Publication Date: July-2022

### Key Findings from the Pilots
- Pilot reviews helped central banks evaluate transparency practices and strengthen dialogue with external stakeholders.
- Recommendations in the CBT reviews received strong traction; authorities provided formal responses and proposed action plans in each DRR.
- Balance between transparency and legitimate confidentiality needs was maintained across reviews.
- Pilot reviews facilitated other IMF workstreams: Financial Sector Assessment Program (FSAP), Article IV consultations, and Technical Assistance (TA).
- Areas of relatively higher transparency across pilots:
  - Monetary policy
  - FX management
  - Legal frameworks
- Areas identified as needing enhanced transparency:
  - Disclosures of Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) efforts
  - Supervisory policies and internal AML/CFT controls
  - Relations with other official institutions

### Feedback and Evaluation
- Staff survey in summer of 2022: five of the seven pilot central banks responded.
- Survey respondents: unanimous positive feedback and high satisfaction with scope, methodology, and review process.
- Participating central banks valued external stakeholder feedback to adjust communication tools, channels, and messages.
- Suggested improvements from authorities:
  - Enhanced guidance for self-assessments;
  - Streamlined review processes;
  - Consideration of transparency changes implemented by central banks before finalization of the review.

### Process, Resource Implications, and Lessons Learned
- Critical success factor: availability of sufficient central bank resources for self-assessments, engagement with IMF staff, and mission activities.
- Pilot experience suggests reviews can be conducted with fewer resources (i.e., five or six review mission members vs. seven or eight, with additional backstopping from IMF HQ during pilot phase).
- Early engagement on the self-assessment with central bank management and staff would reduce resource costs for both IMF and authorities.
- Within the IMF, CBT reviews are conducted by the Monetary and Capital Markets Department (MCM) jointly with the Legal Department (LEG) and Finance Department (FIN), with regional department cooperation.
- Pilot reviews informed potential modifications to the CBT Guidance Note.

### Policy Implications and Next Steps
- Staff will continue to offer CBT reviews to the rest of the IMF membership.
- CBT reviews can be an effective tool to support central bank independence by enhancing transparency and accountability.
- Staff will establish a repository of transparency practices documented during the review process.
- Implementing an expanded program will require additional Fund resources supplemented with donor funding, particularly for low-income countries (LICs).
- Staff will report back to the Executive Board in FY2026 on progress of CBT reviews and an update to the Code following five years of implementation.

---

### FINDINGS ACROSS THE FIVE PILLARS

### A. Pillar I. Transparency in Governance
- Participating central banks disclosed legal frameworks, structure, mandate, autonomy, and decision-making arrangements; further enhancements recommended.
- Specific areas for improved clarity:
  - Procedures for consultation and exchange of information with Ministries of Finance.
  - How tenure of central bank board members is determined.
  - Rationale for central bank financial autonomy and how it is achieved in practice.
  - Activities of internal committees (mandates, brief summaries of deliberations, publishing activity reports).
  - Scope of judicial reviews to which central banks are subject.
- Strengthening accountability disclosures:
  - External publication of annual reports and audited financial statements prepared in accordance with international standards is common.
  - Additional disclosures recommended:
    - (i) internal accountability arrangements (mandate and operations of internal audit functions and Board oversight committees);
    - (ii) statements and strategies for the management of risks mapped to central bank mandates;
    - (iii) key aspects of human capital management (recruitment, promotion, succession planning, diversity, and inclusion).
- Anti-corruption and compliance disclosures:
  - CBT discusses applicability of national anti-corruption legislation and disclosures on internal anti-corruption policies (Codes of Conduct) and whistle-blowing mechanisms.
  - Improve transparency by disclosing applicability of national anti-corruption legislation to management and staff and, while ensuring data privacy, provide more information on implementation and compliance mechanisms for Codes of Conduct (e.g., compliance with financial disclosure, breaches).
- Communications and confidentiality:
  - Recommend development and publication of comprehensive communication strategies, targeted communications, and soliciting stakeholder feedback.
  - Central banks should explain reasons why sensitive information is not disclosed and proactively disseminate confidentiality legal frameworks and methods of implementation.

### B. Pillars II, III, and IV. Transparency in Policies, Operations, and Outcome
- Monetary policy transparency:
  - High level of transparency on frameworks, operations, and outcomes across the seven central banks.
  - Nearly comprehensive transparency on monetary policy targets, decision-making arrangements, instruments, and outcomes.
  - Room for improvement: publish detailed policy deliberations and ex-post evaluations of macroeconomic forecasts and policy decisions.
- FX management, reserves, and capital flows:
  - Detailed disclosures on FX policy framework, objectives, rules, tools, and outcomes; maintain high transparency amid global FX market volatility.
  - Leading practices: publicly available objectives and framework for FX reserve management, breakdown of reserve portfolios, and supporting analysis.
  - More disclosure warranted on FX regulations, procedures and information forms, implementation, and outcomes.
- Financial stability and macroprudential transparency:
  - Practices are somewhat comprehensive; central banks routinely disclose macroprudential policy framework, objectives, instruments, and strategy.
  - Publish regular flagship reports with underlying analysis.
  - Areas for enhanced disclosure:
    - Transparency of inter-agency cooperation where multiple regulators are involved.
    - Regular ex-post evaluations of policy actions.
    - Layered communications to make financial stability information accessible to the general public.
- Market-wide liquidity support and ELA:
  - Strong disclosures on market-wide Emergency Liquidity Assistance (ELA): scope, objectives, rules, procedures, and timely information supporting financial stability.
  - Bilateral ELA disclosures could be enhanced (objectives, general rules, financial parameters, cooperation with prudential regulators) while maintaining necessary confidentiality; can coexist with “constructive ambiguity.”
- Financial integrity (AML/CFT) and consumer protection:
  - Significant scope to enhance transparency on financial integrity: limited disclosures where central banks have AML/CFT supervisory mandates.
  - Recommended disclosures:
    - How ML/TF risks of supervised institutions are assessed;
    - How supervisory policies are defined;
    - How internal resources are allocated to AML/CFT activities.
  - Publish internal AML/CFT frameworks and policies (including resource allocation) and oversight of their effectiveness where applicable.
  - Consumer protection transparency (reviewed for three central banks) included disclosure of regulatory standards on fair treatment, consumer rights, dispute resolution mechanisms, and financial education measures and outcomes.

### C. Pillar V. Transparency in Official Relations
- Enhanced disclosures of relations with domestic and international official stakeholders strengthen central bank autonomy and accountability.
- Typical disclosures via legislative acts and websites are common; recommended enhancements:
  - Publication of Memorandums of Understanding with domestic and international official agencies.
  - Full disclosure of financial transactions with the government.
  - Greater transparency on inter-agency cooperation and coordination of financial sector regulation, subject to consensus among involved parties.

---

### EMERGENCY MEASURES, NEW ROLES, AND COMMUNICATION PRACTICES

### Central Bank Transparency Practices on Emergency Measures and Newly Emerged Roles
- COVID-19 response: central banks adopted extraordinary policy measures and proactively communicated using:
  - (i) regular live press briefings;
  - (ii) a special website section (or separate website) for announcements and exceptional measures;
  - (iii) social media messaging;
  - (iv) published special ex-post studies reviewing monetary and financial policy response to COVID-19.
- External stakeholders praised comprehensive and timely communications.
- Newly emerged roles and responsibilities:
  - Central banks expanded activities into financial inclusion, climate change, and digital currencies.
  - Participating central banks explained how new activities align with legal mandate and objectives.
  - Examples include leading national efforts on financial inclusion and public campaigns on mobile and electronic payments.

---

### CBT PROCESS, GUIDANCE, RESOURCE OPTIMIZATION, AND LINKAGES TO IMF WORK

- Guidance Note updates and process streamlining:
  - Guidance Note would benefit from refinement and more specifics for self-assessment based on frequently asked questions.
  - Earlier engagement with central bank management and staff (including CBT workshops) could save resources.
  - Updated Guidance Note should provide guidance on standardized structure of the DRR and detailed discussions on mission outputs and timelines.
- Resource optimization from pilots:
  - Reviews can be conducted with fewer resources (five or six review mission members vs. seven or eight).
  - Review duration was not an excessive burden; interactions spread across multiple departments.
  - Stakeholder engagement was valuable and could be optimized by focusing on most relevant external audiences.
- Comprehensive five-pillar review is optimal:
  - Comprehensive CBT review best documents transparency practices; a modular approach risks missing critical gaps.
- Contributions to other IMF work:
  - CBT findings provided inputs to FSAP analysis, TA, Article IV consultations, and Use of Fund Resources programs.
  - Examples: inputs for Uruguay FSAP and TA on monetary policy communications to Central Bank of Uruguay.

---

### CONCLUSION AND NEXT STEPS

### Value and Outcomes of the Pilot Reviews
- CBT reviews provide a holistic view through the five-pillar framework beyond monetary policy transparency.
- Reviews inspired central banks to reconsider public understanding of their mission, objectives, and roles.
- Reviews provided independent candid feedback on policy messaging and communication effectiveness.
- Publication of DRRs can reassure markets, donors, parliament, and the public and help defend central bank mandates.

### Continued Offering, Outreach, and Guidance Updates
- Staff will continue to offer CBT reviews as a voluntary Fund product, with emphasis on MIC and LIC in the Development Assistance Committee list of official development assistance recipients.
- CBT Guidance Note will be updated based on pilots’ findings.
- Planned outreach and knowledge-sharing activities:
  - Webinars through IMF regional technical assistance offices.
  - An annual central bank governance and transparency seminar and regional workshops.
  - Publications in the CBT web portal.
- Outreach will preserve confidentiality where required.

### Demand, Resource Implications, and Prioritization
- Expected increase in demand from Advanced Economy, EM, MIC, and LIC central banks.
- Expected operational capacity and cost estimates:
  - It is expected that between four to six reviews can be carried out on an annual basis.
  - Average cost of 0.5-0.7 FTE per review to be distributed among participating departments (MCM, LEG, FIN).
- Supplementary funding for CBT reviews in MIC and LIC and follow-up TA can be resourced through potential donor funding.
- Prioritization considerations:
  - Marginal benefit of enhancing transparency likely higher in countries where transparency is low.
  - Reviewing central banks with advanced transparency practices may provide helpful insights and serve as role models.
  - Geographical and income level representation will be considered.

### Monitoring, Repository, and Planned Updates
- Staff will report back to the Board in FY2026 on progress of CBT reviews and an update to the CBT following five years of implementation.
- Staff will develop a repository of CBT reviews and transparency practices and continue to collect feedback from central banks and CBT reviewers.
- Future CBT reviews will inform a planned update to the CBT, fine-tuning some pillars (for example, further elaboration on consumer protection, and relations with domestic financial and foreign agencies) without altering the CBT.
- Guidance Note will continue to be updated and streamlined based on review experience.

---

### KEY TAKEAWAYS FROM SELECTED PILOT REVIEWS (HIGHLIGHTS)
- Canada (Bank of Canada)
  - Broadly advanced transparency practices; room to improve governance transparency, monetary policy deliberations, and relations with domestic financial agencies.
  - Examples implemented following recommendations:
    - July 2022 Monetary Policy Report included details of BOC’s alternative macroeconomic scenario and analysis of inflation forecast error decomposition.
    - June 2022 Financial System Review updated on inter-agency committees.
    - BOC announced it will publish a Summary of Deliberations after each policy rate announcement, beginning in January 2023.
- Chile (Central Bank of Chile)
  - Broadly advanced transparency with strong legal foundations; monetary policy transparency well-developed.
  - Areas for improvement: financial stability transparency, risk management transparency, and relations with official stakeholders.
  - CBC drafted a roadmap and implemented disclosures prior to DRR publication (e.g., summarizing legal documents in non-technical language and publishing AML/CFT internal control framework).
- Morocco (Bank Al-Maghrib)
  - Expanded comprehensive transparency practices on price stability, financial stability, governance, communication tools, and financial education.
  - Immediate implementation of recommendations related to legal nature, FX policy, and FX reserves management.
- Republic of North Macedonia (NBRNM)
  - Core to advanced transparency practices anchored in law; further disclosures warranted on internal oversight, cross-border flows, FX reserve management, and official relations.
  - NBRNM intends to implement key recommendations and included initiatives in the 2023 working program.
- Uruguay (Central Bank of Uruguay)
  - Strengthening transparency practices already broadly aligned with good practices; commended for comprehensive communication tools and strategy.

---

### COUNTRY-SPECIFIC FOLLOW-UP AND ACTION PLANS (SELECTED)
- BCU (Central Bank of Uruguay)
  - Using CBT outcomes to deepen institutional view on transparency and operationalize improvements.
  - Areas needing elevation to core practices: internal governance and ethics; institutional autonomy; relations with other arms of government.
  - Eight of ten key recommendations identified for immediate implementation; broad expectation that most recommendations would be considered within one year of completion of CBT review.
- CBS (Central Bank of Seychelles)
  - Advanced transparency in FX management, international reserves management, communications, financial stability, and institutional relations.
  - Areas for improvement: governance and accountability arrangements; confidentiality policy; financial integrity.
  - Recent legislation (AML/CFT Act and Financial Consumer Protection Act) and forthcoming Financial Stability Act will require expansion of transparency practices.
- BOU (Bank of Uganda)
  - Transparency practices broadly aligned with good practices; review identified fifteen key recommendations.
  - Areas with scope for improvement: governance and accountability arrangements; macroprudential policy; financial integrity.
  - Actions: publish high-level overview of accountability framework, charters of internal audit and committees, disclose macroprudential policy framework, and compile a confidentiality policy.
  - BOU enacted a detailed action plan and included it in its five-year strategic plan.

---

### APPENDIX — CBT REVIEW QUESTIONNAIRE (HIGH-LEVEL)
- Purpose: collect feedback on CBT Review exercise to advance usefulness and effectiveness of future CBT reviews.
- Questionnaire topics include:
  - reasons for participation in the CBT Review pilot;
  - evaluations of the Self-Review Preparation process and overall review process;
  - clarity of wording in the CBT and Guidance Note;
  - assessments of follow up and post mission work;
  - interactions between mission teams and central bank senior management and staff;
  - deliberations with relevant stakeholders;
  - usefulness of the CBT review framework for internal and external transparency discussions;
  - scope coverage and classification of practices under Core, Expanded, and Comprehensive categories;
  - contributions of the CBT review to central bank accountability;
  - likelihood of recommending the CBT review to other central banks;
  - suggestions for improving the CBT Review process.

*Prepared by team led by Jihad Alwazir (Monetary and Capital Markets Department) and approved by Tobias Adrian — February 3, 2023.*

### EXECUTIVE SUMMARY

### EXECUTIVE SUMMARY

### Overview of the Central Bank Transparency Code (CBT) and Pilot Reviews
- The CBT is a five-pillar framework covering central banks’ transparency in: (i) governance; (ii) policies; (iii) operations; (iv) outcome; and (v) official relations.
- The CBT pilot reviews were conducted between March 2021 and August 2022.
- Seven pilot CBT reviews were completed in 2021–22.
- The CBT Guidance Note supports implementation and provides practical suggestions for reviewers, including dimensions of transparency: means, timeliness, periodicity, and quality of disclosure.
- The CBT Detailed Review Report (DRR) is the main output of each review; each DRR includes the central bank’s response and intended steps to improve transparency.

### Pilot Review Coverage (summary of Table 1)
- Seven central banks were reviewed, representing different regions, income classifications, and exchange rate arrangements. Mission/report timing and selected entries:
  - Canada — Western Hemisphere — High-income — Free floating — Date of Mission: May-2022 — Report Publication Date: September-2022
  - Chile — Western Hemisphere — High-income — Free floating — Date of Mission: March-2021 — Report Publication Date: June-2021
  - Morocco — Middle East and Central Asia — Lower-middle income — Pegged ER within horizontal bands — Date of Mission: April-2022 — Report Publication Date: December-2022
  - Republic of North Macedonia — European — Upper-middle income — Stabilized arrangement — Date of Mission: May-June-2021 — Report Publication Date: January-2022
  - Seychelles — African — High-income — Floating — Date of Mission: June-July-2022 — Report Publication Date: September-2022
  - Uganda — African — Low-income — Floating — Date of Mission: April-2022 — Report Publication Date: (in progress)
  - Uruguay — Western Hemisphere — High-income — Floating — Date of Mission: September-2021 — Report Publication Date: July-2022

### Key Findings from the Pilots
- The pilot CBT reviews helped participating central banks evaluate transparency practices and strengthen dialogue with external stakeholders.
- The pilot reviews documented transparency practices across all key aspects of central banking and highlighted areas for improvement.
- The recommendations in the CBT reviews received strong traction from participating central banks; authorities provided formal responses and proposed action plans in each DRR.
- In all reviews, the balance between transparency and legitimate confidentiality needs was maintained and acknowledged.
- The pilot reviews facilitated other IMF workstreams, notably Financial Sector Assessment Program (FSAP), Article IV consultations, and Technical Assistance (TA).
- Areas of relatively higher transparency across the pilots included:
  - Monetary policy
  - FX management
  - Legal frameworks
- Areas identified as needing enhanced transparency included:
  - Disclosures of Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) efforts
  - Supervisory policies and internal AML/CFT controls
  - Relations with other official institutions

### Feedback and Evaluation
- A staff survey conducted in the summer of 2022 solicited feedback from pilot central banks; five of the seven central banks participating in the pilot phase responded to the survey.
- Survey respondents expressed unanimous positive feedback and high satisfaction with the scope, methodology, and review process.
- Participating central banks highlighted the value of external stakeholder feedback in adjusting communication tools, channels, and messages.
- Authorities noted areas for improvement: enhanced guidance for self-assessments; streamlined review processes; consideration of transparency changes implemented by central banks before finalization of the review.

### Process, Resource Implications, and Lessons Learned
- Critical success factor: availability of sufficient central bank resources to undertake self-assessments, engage with IMF staff, and participate in mission activities.
- The pilot reviews provided information on resources required; CBT review processes could be further streamlined based on the updated CBT Guidance Note.
- Early engagement on the self-assessment with central bank management and staff would reduce resource costs for both IMF and authorities.
- Within the IMF, CBT reviews are conducted by the Monetary and Capital Markets Department (MCM) jointly with the Legal Department (LEG) and Finance Department (FIN), with regional department cooperation.
- The pilot reviews supported assessing the resource cost implications for the IMF and participating central banks and informed potential modifications to the CBT Guidance Note.

### Policy Implications and Next Steps
- Staff will continue to offer CBT reviews to the rest of the IMF membership.
- The pilot experience indicates CBT reviews can be an effective tool to support central bank independence by enhancing transparency and accountability.
- Staff will establish a repository of transparency practices documented during the review process.
- Implementing an expanded program of CBT reviews will require additional Fund resources supplemented with donor funding, particularly for low-income countries (LICs).
- Staff will report back to the Executive Board in FY2026 on the progress of the CBT reviews and an update to the Code following five years of implementation.

*Prepared by team led by Jihad Alwazir (Monetary and Capital Markets Department) and approved by Tobias Adrian — February 3, 2023.*

### 15.      The pilot CBT reviews documented insightful findings across the five-pillar framework,

### 15.      The pilot CBT reviews documented insightful findings across the five-pillar framework,

### A. Pillar I. Transparency in Governance
- Participating central banks disclosed key information on legal frameworks, structure, mandate, autonomy, and decision-making arrangements, but further enhancement of transparency is beneficial.
- Specific areas for improved clarity:
  - Procedures for consultation and exchange of information with Ministries of Finance to facilitate public understanding of institutional autonomy.
  - How the tenure of central bank board members is determined.
  - Rationale for central bank financial autonomy and how this autonomy is achieved in practice.
  - Activities of internal committees (their mandates, brief summaries of deliberations, and publishing activity reports).
  - Scope of the judicial reviews to which central banks are subject.
- Strengthening accountability disclosures:
  - External publication of annual reports and audited financial statements prepared in accordance with international standards is common.
  - Additional disclosures could include:
    - (i) internal accountability arrangements (mandate and operations of internal audit functions and Board oversight committees);
    - (ii) statements and strategies for the management of risks mapped to central bank mandates;
    - (iii) key aspects of human capital management (recruitment, promotion, succession planning, diversity, and inclusion).
- Anti-corruption and compliance disclosures:
  - CBT discusses applicability of national anti-corruption legislation and disclosures on internal anti-corruption policies (Codes of Conduct) and whistle-blowing mechanisms.
  - Transparency could be improved by disclosing applicability of national anti-corruption legislation to management and staff and, while ensuring data privacy, providing more information on implementation and compliance mechanisms for Codes of Conduct (e.g., compliance with financial disclosure, breaches).
- Communications and confidentiality:
  - Development and publication of comprehensive communication strategies and improved communications with the general public are beneficial; targeted communications and soliciting stakeholder feedback are recommended.
  - Central banks should explain reasons why sensitive information is not disclosed and proactively disseminate confidentiality legal frameworks and methods of implementation (including publication on websites), noting that several pilot central banks already have robust confidentiality frameworks established by law.

### B. Pillars II, III, and IV. Transparency in Policies, Operations, and Outcome
- Monetary policy transparency:
  - The seven central banks provide a high level of transparency on monetary policy frameworks, operations, and outcomes.
  - Nearly comprehensive transparency on monetary policy targets, decision-making arrangements, instruments, and outcomes was observed.
  - Room for improvement: publishing detailed policy deliberations and ex-post evaluations of macroeconomic forecasts and policy decisions to clarify possible range of economic outcomes, the central banks’ reaction function, and use of a wider range of policy tools.
- FX management, reserves, and capital flows:
  - Detailed disclosures on FX policy framework, objectives, rules, tools, and outcomes of FX interventions are provided; maintaining high transparency of FX interventions is important amid global FX market volatility.
  - Disclosure practices on international reserve management and capital flows measures are diverse; leading practices include publicly available objectives and framework for FX reserve management, breakdown of reserve portfolios, and supporting analysis.
  - More disclosure warranted on FX regulations, relevant procedures and information forms, implementation, and outcomes.
- Financial stability and macroprudential transparency:
  - Transparency practices for financial stability are somewhat comprehensive; central banks routinely disclose macroprudential policy framework, objectives, instruments, and strategy.
  - Publication of regular flagship reports with underlying analysis is key.
  - Areas for enhanced disclosure:
    - Transparency of inter-agency cooperation where multiple regulators are involved.
    - Regular ex-post evaluations of policy actions.
    - Making financial stability information more accessible to the general public by layering communications as with monetary policy.
- Market-wide liquidity support and ELA:
  - Disclosures on market-wide Emergency Liquidity Assistance (ELA) are strong; central banks disclosed scope, objectives, rules, procedures, and provided timely information supporting financial stability.
  - Transparency was tested during COVID-19, with good disclosure of objectives, parameters, and coverage of extraordinary support measures.
  - Bilateral ELA disclosures could be enhanced (objectives, general rules, financial parameters, cooperation with prudential regulators) while maintaining necessary confidentiality; this can coexist with a policy of “constructive ambiguity” regarding ELA.
- Financial integrity (AML/CFT) and consumer protection:
  - Significant scope to enhance transparency on financial integrity: central banks with AML/CFT supervisory mandates have limited disclosures on scope of activities, supervisory policies, powers, and processes.
  - Recommended disclosures to strengthen trust:
    - How ML/TF risks of supervised institutions are assessed;
    - How supervisory policies are defined;
    - How internal resources are allocated to AML/CFT activities.
  - Publish internal AML/CFT frameworks and policies (including resource allocation) and oversight of their effectiveness where applicable.
  - Consumer protection transparency (reviewed for three central banks) included disclosure of regulatory standards on fair treatment and business conduct, consumer rights and responsibilities, dispute resolution mechanisms, and financial education measures and outcomes.

### C. Pillar V. Transparency in Official Relations
- Enhanced disclosures of relations with domestic and international official stakeholders strengthen central bank autonomy and accountability.
- Typical disclosures via legislative acts and websites are common, but enhancements include:
  - Publication of Memorandums of Understanding with domestic and international official agencies.
  - Full disclosure of financial transactions with the government.
  - Greater transparency on inter-agency cooperation and coordination of financial sector regulation to clarify roles and responsibilities, subject to consensus among involved parties.

### Box 1. Central Bank Transparency Practices on Emergency Measures and Newly Emerged Roles and Responsibilities
- COVID-19 response: participating central banks adopted extraordinary policy measures and proactively communicated them to external stakeholders, using:
  - (i) regular live press briefings;
  - (ii) a special website section (or separate website) for announcements and exceptional measures;
  - (iii) social media messaging;
  - (iv) published special ex-post studies reviewing monetary and financial policy response to COVID-19.
- External stakeholders praised comprehensive and timely communications as augmenting the success of support measures.
- Newly emerged roles and responsibilities:
  - Central banks expanded activities beyond price stability and financial stability into areas like financial inclusion, climate change, and digital currencies.
  - Participating central banks explained how new activities align with legal mandate and objectives.
  - Examples: leading national efforts on financial inclusion and public campaigns to educate on mobile and electronic payments and terms and conditions of payment services.

### CBT process, Guidance Note, resource optimization, and linkages to IMF work
- Guidance Note updates and process streamlining:
  - CBT Guidance Note would benefit from refinement and more specifics for self-assessment based on frequently asked questions.
  - Earlier engagement with central bank management and staff (including CBT workshops to discuss scope and modalities) could save resources on both sides.
  - Updated Guidance Note should provide guidance on standardized structure of the DRR and more detailed discussions on review mission outputs and timelines.
- Resource optimization from pilots:
  - Pilot experience suggests reviews can be conducted with fewer resources (i.e., five or six review mission members vs. seven or eight, with additional backstopping from IMF HQ during pilot phase).
  - Review duration was not an excessive burden; interactions spread across multiple departments rather than concentrated.
  - Extensive stakeholder engagement was valuable and could be optimized by focusing on the most relevant external audiences in each review.
- Comprehensive five-pillar review is optimal:
  - Pilot experience indicates comprehensive CBT review across the five-pillar framework best documents transparency practices; a modular approach risks missing critical gaps.
  - Within five-pillar reviews, central banks may indicate heightened attention to particular areas needing enhancements.
- Contributions to other IMF work:
  - CBT reviews provide useful contributions to Financial Sector Assessment Program (FSAP) analysis (example: inputs for Uruguay FSAP on disclosure of roles and responsibilities of Financial Stability Committee and agencies).
  - CBT findings supported IMF capacity development (e.g., TA on monetary policy communications to Central Bank of Uruguay drew on CBT findings).
  - IMF Area Department teams benefited from review process and published findings, ensuring consistency with IMF bilateral engagements (Article IV consultations and Use of Fund Resources programs).

*International Monetary Fund — THE CENTRAL BANK TRANSPARENCY CODE—FINDINGS OF THE PILOT REVIEWS*

### CONCLUSION AND NEXT STEPS

### CONCLUSION AND NEXT STEPS

### Pilot review outcomes and value of the CBT
- The CBT review can be an effective tool for enhancing overall transparency and accountability of central banks by providing a holistic view through the CBT’s five-pillar framework that extends beyond monetary policy transparency.
- Internally, reviews inspired participating central banks to reconsider what is needed to achieve better public understanding of their mission, objectives, and roles.
- Reviews provided independent candid feedback on stakeholder views of the effectiveness of policy messaging and communication.
- Externally, reviews helped stakeholders better understand central bank governance, reinforcing public trust and confidence.
- The seven pilot reviews confirmed the CBT’s utility as a diagnostic tool to help central banks make informed choices on transparency arrangements and improve communication traction with stakeholders.
- In EM and LIC where national governance challenges and corruption episodes may exist, a CBT review can reassure markets, donors, and the public of the soundness of central bank governance frameworks.

### CBT reviews and central bank autonomy
- Because CBT review reports come from an independent third party, publication may help central banks explain their positions to government, parliament, markets, and the public.
- The review was seen as helpful in deflecting possible challenges to mandates from the legislature, finance ministry, or other government agencies.
- The CBT review allows central banks to explain policy decisions and be transparent about deliberations and outcomes.
- Publication of the DRR helps assure external stakeholders of transparency and accountability, reinforcing public trust and confidence.

### Contribution to other IMF workstreams
- CBT review recommendations could contribute to other IMF workstreams such as FSAP reports, Article IV discussions, Governance Diagnostic Assessments, and TA programs by:
  - Incorporating central bank action plans to address weaknesses identified in CBT reviews.
  - Identifying areas for potential follow-up TA.
- Transparency aspects related to central bank policy initiatives (for example, analyses of central bank digital currencies and actions in dealing with the pandemic) are reviewed in the context of Article IV and FSAP reports.

### Continued offering, outreach, and guidance updates
- Staff will continue to offer CBT reviews as a voluntary Fund product to the membership, with particular emphasis on middle-income (MIC) and low-income countries in the Development Assistant Committee list of official development assistance recipients.
- The CBT Guidance Note will be updated based on pilots’ findings to facilitate the review process and optimize resources.
- Planned outreach and knowledge-sharing activities include:
  - A series of webinars launched through IMF regional technical assistance offices highlighting the CBT review design and expected outcomes.
  - An annual central bank governance and transparency seminar and regional workshops.
  - Publications in the CBT web portal.
- Outreach and knowledge sharing will draw on lessons and experiences while preserving confidentiality of exercises and country participants when required.

### Demand, resource implications, and prioritization
- Demand for CBT reviews is expected to increase, with expressed interest from a number of Advanced Economy, EM, MIC, and LIC central banks.
- It is expected that CBT reviews will become a regular voluntary offering and will require additional budgetary resources on an annual basis.
- Past pilot costs were mainly absorbed by participating departments from within existing budgets.
- Expected operational capacity and cost estimates:
  - It is expected that between four to six reviews can be carried out on an annual basis.
  - Average cost of 0.5-0.7 FTE per review to be distributed among participating departments (MCM, LEG, FIN).
- Supplementary funding for CBT reviews in MIC and LIC central banks and follow-up tailored technical assistance can be resourced through potential funding from interested donors.
- Prioritization considerations:
  - Marginal benefit of enhancing transparency likely higher in countries where transparency is low.
  - Reviewing central banks with relatively advanced transparency practices may provide helpful insights and best practices and serve as role models.
  - Geographical and income level representation will be considered.

### Monitoring, repository, and planned updates
- Staff will report back to the Board in FY2026 on the progress of CBT reviews and an update to the CBT following five years of implementation.
- Staff will develop a repository of CBT reviews and transparency practices from central banks that undertake the review and will continue to collect and analyze feedback from central banks and CBT reviewers.
- Collected data will provide insights for other central banks and be a useful resource for research and future policy design.
- Future CBT reviews will inform a planned update to the CBT by reflecting changes in central banks’ roles and transparency practices; the update will fine-tune some pillars (for example, further elaboration on consumer protection, and relations with domestic financial and foreign agencies) without altering the CBT.
- The Guidance Note will continue to be updated and streamlined based on review experience to further clarify the review process for central bank staff undertaking self-assessment.

### Key takeaways from selected pilot reviews
- Canada (Bank of Canada)
  - The BOC has broadly advanced transparency practices; stakeholders view it as open, dynamic, and transparent, especially on financial stability policies, ELA framework, HR management, and relations with foreign agencies.
  - Room to improve transparency on governance aspects, monetary policy deliberations, and relations with domestic financial agencies; could provide more information on monetary policy deliberations, ex-post policy evaluations, and alternative macroeconomic scenarios.
  - CBT recommendations received strong traction; examples implemented:
    - July 2022 Monetary Policy Report included details of BOC’s alternative macroeconomic scenario and an analysis of inflation forecast error decomposition.
    - June 2022 Financial System Review provided an update on inter-agency committees dealing with financial stability issues.
    - BOC announced it will publish a Summary of Deliberations after each policy rate announcement, beginning in January 2023.
    - Commitment to enhance transparency around risk management and audit functions and communicate in plain language about financial stability issues.

- Chile (Central Bank of Chile)
  - CBC has broadly advanced transparency practices with strong legal foundations and public trust.
  - Transparency over monetary policy is especially well-developed due to inflation targeting and a free-floating exchange rate regime.
  - Areas for improvement: financial stability transparency (including disclosure of the CBC’s financial stability mandate and delineation from other institutions), risk management transparency, and relations with official stakeholders.
  - CBC drafted a roadmap to address recommendations and implemented numerous disclosures before publication of the Detailed Review Report (for example, summarizing legal documents in non-technical language and publishing the AML/CFT internal control framework).

- Morocco (Bank Al-Maghrib)
  - BAM implemented expanded and comprehensive transparency practices, notably on price stability, financial stability, governance disclosure, novel communication tools, and financial education.
  - Areas for improvement: legal framework, risk management, confidentiality system, exchange rate policy institutional framework, FX reserves management, financial integrity, and external relations.
  - Recommendations on disclosing information related to legal nature, FX policy, and FX reserves management were immediately implemented; BAM intends regular comprehensive reviews of its transparency framework.

- Republic of North Macedonia (National Bank of the Republic of North Macedonia)
  - NBRNM implements core to advanced transparency practices anchored in law and designated as a strategic objective, earning stakeholder trust.
  - Advanced transparency in core monetary policy areas; further improvements expected with new Law on Financial Stability.
  - Additional disclosures warranted on internal oversight arrangements, cross-border financial flows and FX administration, FX reserve management, and official relations; public understanding of Audit Committee role could be enhanced.
  - NBRNM found the review insightful and intends to implement key recommendations; expanded website information on internal audit and risk management, strengthened confidentiality framework disclosure, and included initiatives in the 2023 working program.

- Uruguay (Central Bank of Uruguay)
  - BCU is strengthening transparency practices already broadly aligned with good central bank practices.
  - Commended for comprehensive communication tools and strategy; advanced transparency in monetary policy and FX management.
  - BCU maintains public respect and trust and has a culture of transparency that covers primary and secondary responsibilities such as consumer protection and financial education.

*Source: THE CENTRAL BANK TRANSPARENCY CODE—FINDINGS OF THE PILOT REVIEWS — CONCLUSION AND NEXT STEPS.*

### 16.      The BCU is forging ahead with strategic plans to improve transparency practices and

### 16.      The BCU is forging ahead with strategic plans to improve transparency practices and

### BCU — strategic plans and transparency gaps
- The BCU is using outcomes from the CBT review to deepen its institutional view on transparency and to operationalize ongoing improvements.
- The CBT review identified areas needing attention for transparency to be elevated to at least core practices:
  - internal governance and ethics;
  - institutional autonomy; and
  - relations with other arms of government.
- Recent initiatives on monetary policy communication and its coordination with fiscal policy can support efforts to establish clarity in the BCU’s operational autonomy over monetary and FX policy decisions.
- In macroprudential policy and crisis management activities the BCU will need to:
  - strive for consensus on transparency;
  - be mindful of confidentiality obligations; and
  - consider shared responsibility for some functions when shaping disclosures.

### CBT review reception and follow-up at the BCU
- The CBT review was acknowledged as being effective and the recommendations received strong traction with the BCU.
- BCU management and staff demonstrated a high commitment to conduct the review and articulated a roadmap for actions to improve the application of transparency practices.
- Eight of ten key recommendations were identified for immediate implementation.
- Immediate actions the BCU said it would take:
  - gather and organize existing information, including official documents and other publications; and
  - disseminate that information through its website.
- Other recommendations will be analyzed in the context of strategic guidelines alongside the applicable legal framework.
- The broad expectation expressed by the BCU is that most recommendations would be considered within one year of completion of CBT review.

### Key takeaways — Central Bank of Seychelles (CBS)
- The CBS sets a high benchmark for transparency given the level of economic and financial development in Seychelles and enjoys a high level of trust and accountability among stakeholders.
- The CBS has an advanced transparency framework in:
  - FX management;
  - international reserves management;
  - communications;
  - financial stability; and
  - institutional relations.
- The CBS exhibits a high level of transparency on monetary policy and FX operations but may enhance it further in the wake of transitioning to an inflation targeting regime.
- During the COVID-19 pandemic the CBS:
  - took the lead in communications on extraordinary support programs;
  - regularly engaged with the public using plain language and various communication tools.
- The CBS is promoting financial inclusion by developing and implementing a broad agenda on financial education and enhancing consumer protection in the financial sector.
- Areas for improved transparency at the CBS:
  - governance and accountability arrangements;
  - confidentiality policy; and
  - financial integrity.
- Current disclosures and recommended enhancements:
  - CBS is disclosing information on its legal framework, key elements of risk, human resource management, accountability, and anti-corruption arrangements.
  - To better support perception as a well governed institution, CBS should consider highlighting these aspects in its annual report, and/or provide additional information on its website, particularly on human capital management, anti-corruption policies and decision-making arrangements.
  - Improve accessibility of information on internal governance by overhauling respective sections of the Annual Report and its website and proceeding with publication of its Code of Conduct and Ethics.
  - Enhance disclosures on the processes and outcomes of its AML/CFT external policies and internal controls.
- Authorities noted the CBT review complements CBS efforts to strengthen dialogue with stakeholders, especially after COVID-19 and recent/planned expansion of CBS powers.
- Recent and forthcoming legislation affecting CBS transparency practices:
  - adoption of the AML/CFT Act and Financial Consumer Protection Act expanded CBS regulatory powers;
  - the forthcoming Financial Stability Act is expected to provide a transparent legal basis for the CBS’s (and other financial sector regulators) actions on financial stability.
- These legislative acts will require expansion of CBS’s transparency practices so related activities continue to be appropriately disclosed to stakeholders.

### Key takeaways — Bank of Uganda (BOU)
- The BOU is implementing transparency practices broadly aligned with good central bank practices.
- Transparency practices largely conform to various dimensions of transparency as information is disseminated through several channels.
- The review identified room to enhance quality of transparency in areas relevant to supporting institutional accountability and provided fifteen key recommendations.
- Areas with scope for improvement:
  - governance and accountability arrangements;
  - macroprudential policy; and
  - financial integrity.
- Specific recommendations for BOU:
  - make information on legal framework and governance arrangements more accessible;
  - enhance clarity on accountability arrangements by publishing a high-level overview of the accountability framework and the charters of the internal audit function and relevant committees;
  - disclose the macroprudential policy framework and how objectives are mapped to relevant policy instruments;
  - ensure policy decisions are published in a timely and uniform manner;
  - consider disclosure of its internal AML/CFT framework and internal controls, with appropriate confidentiality and safeguards.
- On confidentiality: the BOU may compile and develop a policy on confidentiality, including reasons for decisions, and be systematic in how it decides what to disclose and what to keep confidential.
- Stakeholders would benefit if the BOU published information on its confidentiality policies and the logic behind them.
- The Bank of Uganda welcomed the CBT review mission’s recommendations.
- The BOU has enacted a detailed action plan to implement CBT review recommendations and included it as part of its five-year strategic plan.

### Appendix II — CBT Review Questionnaire (high-level)
- Purpose: collect feedback on the CBT Review exercise to advance usefulness and effectiveness of future CBT reviews.
- Questionnaire covers topics including:
  - reasons for participation in the CBT Review pilot;
  - evaluations of the Self-Review Preparation process and overall review process;
  - clarity of wording in the CBT and Guidance Note;
  - assessments of follow up and post mission work;
  - interactions between mission teams and central bank senior management and staff;
  - deliberations with relevant stakeholders;
  - usefulness of the CBT review framework for internal and external transparency discussions;
  - scope coverage and classification of practices under Core, Expanded, and Comprehensive categories;
  - contributions of the CBT review to central bank accountability;
  - likelihood of recommending the CBT review to other central banks;
  - suggestions for improving the CBT Review process.

*Prepared by Dmytro Solohub (MCM); Prepared by Asad Qureshi (MCM).*

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_Source: https://www.imf.org/-/media/files/publications/pp/2023/english/ppea2023006.pdf_