## Quasi-Fiscal Implications of Central Bank Interventions — Executive Summary

## Source details

**Canonical URL:** [Quasi-Fiscal Implications of Central Bank Interventions — Executive Summary](https://www.imf.org/-/media/files/publications/wp/2023/english/wpiea2023114-print-pdf.pdf)

## Other formats

- [Markdown version](/-/media/files/publications/wp/2023/english/wpiea2023114-print-pdf.pdf.md)
- [Structured JSON version](/-/media/files/publications/wp/2023/english/wpiea2023114-print-pdf.pdf.json)

---

### Overview
- Central banks implemented a range of unconventional and sometimes novel policy responses to the Covid-19 pandemic; while these were largely successful, many also had fiscal implications.
- For the purposes of this paper, the period of the Covid-19 crisis is defined as 2020-2021.
- The paper develops a stylized balance sheet framework to identify ‘quasi-fiscal’ components of central bank crisis interventions and to trace sources of fiscal risk.

### Stylized balance sheet framework
- A central bank activity is considered to have a quasi-fiscal component when it impacts materially the fiscal accounts, and/or affects other aspects of fiscal policy (tax, spending, financing), either directly or in the future.
- Constructing a stylized ‘core’ central bank balance sheet shows that central bank balance sheets do not necessarily have fiscal components (consistent with many central bank balance sheets prior to the GFC).
- Augmenting the core balance sheet with crisis activities shows how financial risks are created from both the asset side and the liability side.
- Quasi-fiscal fiscal risk depends critically on how an intervention is funded; interventions conducted at the zero-lower bound (ZLB) carry additional fiscal implications when funded by newly-created reserves.
- In the non-quasi-fiscal archetype, central bank operations are largely fee/revenue covering and yield operational surpluses paid to the Treasury; there are no implicit taxes and subsidies in that stylized setup.

### Empirical findings from the Covid-19 crisis
- Sample and methods:
  - Based on a sample of 67 central banks.
  - Survey of 176 central bank interventions undertaken between March and December 2020.
- Balance sheet expansions:
  - The median balance sheet increased by around 6 percent of GDP during 2020−21 compared to 2 percent in the GFC.
  - In 10 percent of cases, balance sheets expanded by more than 20 percent of GDP.
  - Expansion in central bank assets was larger in advanced economies where quantitative easing programs drove balance sheet expansion relative to emerging market economies (EMEs) and low-income countries (LICs), where financial sector support was more important.
  - Only a few central banks provided direct support to the non-financial sector; for those that did, the size of support was relatively small in most cases.
- Government debt and central bank holdings:
  - Of central banks that increased their holdings of government debt during Covid-19:
    - Net purchases represented more than 10 percent of the outstanding debt stock in 20 percent of cases.
    - Net purchases more than fully covered the government’s additional borrowing requirements in 10 percent of cases.
  - In 40 percent of cases, central banks fully financed their new claims on government with additional issuance of commercial bank reserves, implying a dramatic shortening in the maturity of consolidated public liabilities and an increase in interest rate risk.

### Quasi-fiscal risks by operation
- Financial market support facilities:
  - Unconventional liquidity operations to the financial sector typically increased financial risks by lowering collateral eligibility criteria, interest rates or haircuts below standard conventionally acceptable levels.
  - As support was extended to new counterparties, including loans to small and medium-sized companies, central banks took new types of risks onto their balance sheet that they were not accustomed to assess (and price).
- Non-financial market support facilities:
  - Support to the non-financial sector was not widespread but was significant for some central banks; purchases of private sector securities and loans to corporates/households transferred investment risk onto central banks.
- Purchases of government securities (QE and LSAPs):
  - Large-scale purchases of government securities transferred a considerable amount of interest rate risk from private investors onto the consolidated sovereign balance sheet.
  - Purchases were often funded by creation of new commercial bank reserves, facilitating government financing needs during the pandemic but shortening liability maturity and increasing interest rate risk.
- Liability-side risks:
  - Interventions funded by issuance of interest-bearing central bank debt (or reliance on short-term interest-bearing liabilities) magnify financial risks facing central banks and can materially affect central bank net income when interest rates rise.
- Overall:
  - Counterparties of crisis interventions typically receive an implicit subsidy, since eligibility criteria of unconventional schemes provide preferential treatment to participants.

### Risk mitigation, governance, and fiscal coordination
- Risk mitigation provisions observed in practice:
  - Use of repos or swaps instead of outright purchases.
  - Setting exposure caps and tight eligibility criteria.
  - Enhancing asset management expertise.
  - Sunset clauses and asset swaps with the government or private sector in some cases to mitigate risks and increase transparency.
- Measures to promote accountability:
  - Timely and transparent reporting.
  - Proper accounting treatment.
  - Strong central bank governance.
- Role of the fiscal authority:
  - Fiscal authorities in several countries played an active role in risk management, including providing robust fiscal backstops and enhancing oversight and policy coordination.
  - Government indemnities for specific liquidity support operations were relatively common.
  - Comprehensive central bank recapitalization frameworks covering a wide set of risks were not common.
  - Strengthened external oversight procedures and reporting requirements were adopted in some countries.
- Institutional allocation of intervention tasks:
  - Similar operations were implemented by central banks in some countries and by fiscal authorities in others (e.g., purchases of mortgage-backed securities).
  - Government implementation of some crisis interventions can be successful and may allow more transparent and effective management of fiscal risks.
  - Where feasible, government implementation can limit assets with quasi-fiscal components on the central bank’s balance sheet and help safeguard operational autonomy for core mandates.

### Policy implications and good-practice principles
- Identify quasi-fiscal components of interventions using a balance sheet approach to assess impacts on fiscal accounts and public-sector balance sheets.
- Design interventions with clear accountabilities, appropriate policy coordination, strong fiscal and central bank transparency, and adequate central bank balance sheet protection.
- Use risk mitigation measures (repos/swaps, exposure caps, eligibility criteria) and strengthen asset management capacity when central banks undertake non-traditional asset holdings.
- Ensure fiscal backstops or indemnities where central banks assume significant quasi-fiscal risks; consider whether some interventions are better conducted on the government balance sheet.
- Enhance oversight and reporting to improve transparency and manage contingent fiscal liabilities arising from central bank crisis interventions.

### Box 1 — Interest rate risks from central bank purchases of government securities
- Risks to public debt management:
  - Issuance of very short-term central bank debt securities to finance non-core assets can complicate public debt management.
  - When a central bank issues debt into the same market as the Treasury, it can lead to segmentation in the market for public securities, creating market inefficiencies.
  - Large-scale central bank purchases of long-dated government bonds financed with overnight interest-bearing instruments reduce the average duration of consolidated public debt held by the market, while increasing the risk profile of consolidated public debt.
  - These purchases can prevent a steep increase in sovereign yields and so provide space for additional crisis fiscal measures; however, when central banks do not coordinate these operations with their respective Treasury, it can lead to inefficiencies in sovereign debt management.
- Implicit subsidies and taxes:
  - Counterparties of central banks’ crisis interventions typically receive an implicit subsidy.
  - The eligibility criteria of unconventional schemes by nature provide preferential treatment to participants.
- Notable example:
  - The Federal Reserve’s Secondary Market Corporate Credit Facility purchased debt securities of 86 companies rated BB and above in March 2020, including Coca Cola, Walmart and McDonalds.
- Key findings on interest rate and fiscal risk:
  - QE often replaced higher coupon fixed-rate debt with very short-term floating rate liabilities (bank reserves), producing a temporary cash-flow improvement described as a “fiscal illusion” because it was not risk-adjusted.
  - Interest-rate risk on consolidated public sector balance sheets increased dramatically in some cases.
  - A sharp increase in policy and market rates in 2022 revealed the risk-adjusted reality:
    - Interest payments on very short-term floating rate debt soared, placing many central banks in a negative net income position and sharply reducing financial transfers to governments.
    - The US and UK central banks began to make cash losses on their stock of asset purchases in 2022, which are expected to continue for some time.
- Accounting considerations and timing of losses:
  - Timing of capital losses depends on institutional accounting practices; recognizing losses up front (marked to market) yields a much larger immediate effect than recognizing them gradually.
  - Example: in 2022 the Fed reported a $807 billion unrealized loss on its holdings of Treasury securities (and a $1.2 billion loss on its overall holdings).
  - Two accounting methods for interest rate increases on central bank finances:
    - Flow method: recognizes losses gradually over time as they are realized in cash flow.
    - Stock method: recognizes valuation losses immediately in the profit and loss statement.
  - Valuation practices vary: some central banks value QE assets at market prices; most central banks (including the Fed, ECB and BoJ) value QE assets at amortized value.
- Mechanisms amplifying fiscal exposure:
  - Large “excess” reserve holdings can create implicit taxes on the financial sector.
  - With many commercial banks now holding trillions in excess reserves at major AE central banks, reserve remuneration has significant fiscal dimensions.
- Risks on exit and legacy balance sheet impacts:
  - Exiting crisis interventions can leave a large quasi-fiscal central bank balance sheet persisting long after a crisis ends.
  - A larger central bank balance sheet can create potential for large operational losses as interest rates rise, possibly making the central bank reluctant to raise rates even when justified.
- Additional risks for EMDEs:
  - EMDEs face larger fiscal risks from central bank interventions relative to AEs due to shallower financial markets and more illiquid collateral.
  - Central bank financial weakness can impair attainment of core policy objectives and generate negative macro-fiscal feedback loops.
  - Operating with negative equity does not eliminate fiscal risks; large non-core losses may be financed via equity buffers or government transfers, both implying fiscal costs.

### Section II — Financial risks and design features to limit them (high-level design guidance)
- Interventions create credit, market, and interest rate risks ultimately borne by the fiscal authority even if initially absorbed by the central bank.
- Design features to limit risks include:
  - Use of repos or swaps instead of outright purchases to limit outright ownership of securities and keep risks on private balance sheets.
  - Exposure caps and eligibility criteria to avoid supporting insolvent institutions or “picking favorites,” and to cap aggregate size of interventions.
  - Sunset clauses and short maturities to facilitate unwinding.
  - Enhancing asset management capabilities, including ringfencing in an SPV or VIE and bringing external expertise.
- Fiscal risk management frameworks and fiscal backstops:
  - Strong arguments exist for the fiscal authority to directly bear financial risks through assuming assets/liabilities onto the government balance sheet or providing guarantees.
  - Examples and numeric references:
    - Chile’s asset purchase program was capped at USD 8.0 billion.
    - Sweden’s asset purchase program was capped at SEK 700 billion.
    - The Eurosystem reduced collateral valuation haircuts by a fixed 20 percent.
    - Bank of Canada indemnified some programs through injections of government deposits of around 3 percent of GDP.
    - In the US, of 13 credit facilities introduced by the Fed in 2020, the Treasury provided capital support amounting to 0.5 percent of GDP at end-2020 to the 9 structured as SPVs.
    - New Zealand provided an indemnity for the central bank’s Large-Scale Asset Purchase Program and in 2022 began payments to the central bank to offset net interest income losses related to bonds bought in 2021 and 2022.
- Central bank governance, transparency, and accounting:
  - Clear mandates, enhanced internal oversight, transparent reporting, and adherence to accounting standards (e.g., IFRS) promote accountability.
  - Only about a quarter of the world’s central banks currently apply IFRS (IMF, 2021).
  - The IMF’s Central Bank Transparency Code recommends publishing regular, timely, and easily accessible reports on size, terms, financial flows, impacts, and official relations with government.
- Oversight, monitoring, coordination:
  - Enhanced external oversight, monitoring, and data-sharing are warranted but should preserve monetary policy independence.
  - Coordination mechanisms include legislation-defined coordination bodies, MoUs, SLAs, or ad-hoc cooperation.
- Facilitating exit:
  - Options include asset swaps with the Treasury, transferring private sector assets to the government balance sheet for gradual liquidation, converting holdings into short-term bills, and transparent sunset conditions.
  - Trade-offs: selling into thin markets can realize losses; alternatives include swaps or transfers to the Treasury or SPV.

### Key statistics and numeric references (preserved exactly)
- Sample: 67 central banks.
- Survey: 176 central bank interventions undertaken between March and December 2020.
- Median balance sheet increase: around 6 percent of GDP during 2020−21.
- GFC comparison: 2 percent in the GFC.
- In 10 percent of cases, balance sheets expanded by more than 20 percent of GDP.
- Net purchases represented more than 10 percent of the outstanding debt stock in 20 percent of cases.
- Net purchases more than fully covered the government’s additional borrowing requirements in 10 percent of cases.
- In 40 percent of cases, central banks fully financed their new claims on government with additional issuance of commercial bank reserves.
- Chile cap: USD 8.0 billion.
- Sweden cap: SEK 700 billion.
- Eurosystem haircut reduction: fixed 20 percent.
- Bank of Canada deposits: around 3 percent of GDP.
- US Treasury capital support: 0.5 percent of GDP at end-2020 to 9 SPV-structured facilities (of 13 Fed facilities introduced in 2020).
- Example Fed unrealized loss in 2022: $807 billion on Treasury securities (and a $1.2 billion loss on overall holdings).
- Many Covid-19 liquidity support operations expired within one year.
- Only about a quarter of the world’s central banks currently apply IFRS (IMF, 2021).
- PIMCO selected as investment manager and State Street Bank as custodian and accounting administrator in March 2020 for US Fed operational assistance managing the CPFF.

*Quasi-Fiscal Implications of Central Bank Interventions — Executive Summary (wpiea2023114-print-pdf)*

### Executive Summary __________________________________________________________________ 7

### Executive Summary

### Document structure and sections
- I.  Introduction _____________________________________________________________________ 9
- II. A Balance Sheet Framework ________________________________________________________ 10
- II. Stylized Facts on Central Bank Interventions During the Covid-19 Crisis __________________ 19
- IV. Managing Fiscal Risks From Central Bank Crisis Interventions __________________________ 27
- V. Conclusion ____________________________________________________________________ 37
- ANNEX I. Quasi-Fiscal Concepts ______________________________________________________ 38
- ANNEX II. Stylized Central Bank Balance Sheet Tables ____________________________________ 40
- REFERENCES ______________________________________________________________________ 44

### Figures (listed with exact captions)
- 1. A Stylized Non-Quasi-Fiscal Central Bank Balance Sheet __________________________________ 11
- 2. Stylized Central Bank Balance Sheets pre-GFC __________________________________________ 13
- 3. Stylized Quasi-Fiscal Central Bank Balance Sheets during Systemic Financial Crises  ____________ 18
- 4. Change in Central Bank Assets: Covid-19 vs GFC ________________________________________ 21
- 5. Change in Central Bank Balance Sheet Items: Covid-19 vs GFC _____________________________ 22
- 6. Change in Central Bank Claims on Financial and Non-financial Sectors (2019–2021) _____________ 23
- 7. Central Bank Claims (2020-2021) _____________________________________________________ 24
- 8. Central Bank Holdings of Government Debt: 2021 vs 2019 _________________________________ 25
- 9. Gross Government Borrowing Through Marketable Debt ___________________________________ 25
- 10. Change in Reserves vs Change in CB Claims on Government ______________________________ 25
- 11. Government Deficit vs Change in Central Bank Claims on Government _______________________ 25
- 12. Publication of Covid-19 Policy Measures _______________________________________________ 32

### Tables (listed with exact captions)
- 1. A Typology of Fiscal Risks from Central Bank Activities pre-GFC _____________________________ 13
- 2. A Typology of Fiscal Risks from Central Bank Interventions During Systemic Crises ______________ 19
- 3. Fiscal Risks Associated with Central Bank Interventions During the Covid-19 Pandemic ___________ 27

### Glossary entries (as listed)
- AE Advanced Economy
- APF Asset Purchase Facility
- BoE Bank of England
- BIS Bank for International Settlements
- CARES Act Coronavirus Aid, Relief, and Economic Security Act
- CB Central Bank
- CBID Central Bank Interventions Database
- CBT Central Bank Transparency
- CCFF Covid-19 Corporate Financing Facility
- CIC Currency in Circulation
- CPFF Commercial Paper Funding Facility
- DM Developed Market
- ECB European Central Bank
- EME Emerging Market
- EMDE Emerging Market or Developing Economy
- EU European Union
- FMS Financial Market Support Facilities
- FX Foreign Exchange
- GDP Gross Domestic Product
- GFC Global Financial Crisis
- IFRS International Financial Regulation Standards
- LIC Low-income Country
- LPR Liquidity-providing Repo
- LWR Liquidity-withdrawing Repo
- LOLR Lender of Last Resort
- MBS Mortgage-Backed Securities
- MFS Monetary and Financial Statistics
- MPC Monetary Policy Committee
- NFS Non-Financial Sector Support Facilities
- PS Purchases of Private Securities
- PSBS Public Sector Balance Sheet
- ONS Office for National Statistics
- QE Quantitative Easing
- Repo Repurchase Agreement
- SPV Special Purpose Vehicle
- TS Purchases of Treasury Securities
- TSA Treasury Single Account
- UK United Kingdom
- USA United States of America
- VIE Variable Interest Entity
- ZLB Zero Lower Bound

_Executive Summary — wpiea2023114-print-pdf (pages and contents as listed in the provided source excerpt)_

### Executive Summary

### Executive Summary

### Overview
- Central banks implemented a range of unconventional and sometimes novel policy responses to the Covid-19 pandemic; while these were largely successful, many also had fiscal implications.
- For the purposes of this paper, the period of the Covid-19 crisis is defined as 2020-2021.
- The paper develops a stylized balance sheet framework to identify ‘quasi-fiscal’ components of central bank crisis interventions and to trace sources of fiscal risk.

### Stylized balance sheet framework
- A central bank activity is considered to have a quasi-fiscal component when it impacts materially the fiscal accounts, and/or affects other aspects of fiscal policy (tax, spending, financing), either directly or in the future.
- Constructing a stylized ‘core’ central bank balance sheet shows that central bank balance sheets do not necessarily have fiscal components (consistent with many central bank balance sheets prior to the GFC).
- Augmenting the core balance sheet with crisis activities shows how financial risks are created from both the asset side and the liability side.
- Quasi-fiscal fiscal risk depends critically on how an intervention is funded; interventions conducted at the zero-lower bound (ZLB) carry additional fiscal implications when funded by newly-created reserves.
- In the non-quasi-fiscal archetype, central bank operations are largely fee/revenue covering and yield operational surpluses paid to the Treasury; there are no implicit taxes and subsidies in that stylized setup.

### Empirical findings from the Covid-19 crisis
- Sample and methods:
  - Based on a sample of 67 central banks.
  - Survey of 176 central bank interventions undertaken between March and December 2020.
- Balance sheet expansions:
  - The median balance sheet increased by around 6 percent of GDP during 2020−21 compared to 2 percent in the GFC.
  - In 10 percent of cases, balance sheets expanded by more than 20 percent of GDP.
  - Expansion in central bank assets was larger in advanced economies where quantitative easing programs drove balance sheet expansion relative to emerging market economies (EMEs) and low-income countries (LICs), where financial sector support was more important.
  - Only a few central banks provided direct support to the non-financial sector; for those that did, the size of support was relatively small in most cases.
- Government debt and central bank holdings:
  - Of central banks that increased their holdings of government debt during Covid-19:
    - Net purchases represented more than 10 percent of the outstanding debt stock in 20 percent of cases.
    - Net purchases more than fully covered the government’s additional borrowing requirements in 10 percent of cases.
  - In 40 percent of cases, central banks fully financed their new claims on government with additional issuance of commercial bank reserves, implying a dramatic shortening in the maturity of consolidated public liabilities and an increase in interest rate risk.

### Quasi-fiscal risks by operation
- Financial market support facilities:
  - Unconventional liquidity operations to the financial sector typically increased financial risks by lowering collateral eligibility criteria, interest rates or haircuts below standard conventionally acceptable levels.
  - As support was extended to new counterparties, including loans to small and medium-sized companies, central banks took new types of risks onto their balance sheet that they were not accustomed to assess (and price).
- Non-financial market support facilities:
  - Support to the non-financial sector was not widespread but was significant for some central banks; purchases of private sector securities and loans to corporates/households transferred investment risk onto central banks.
- Purchases of government securities (QE and LSAPs):
  - Large-scale purchases of government securities transferred a considerable amount of interest rate risk from private investors onto the consolidated sovereign balance sheet.
  - Purchases were often funded by creation of new commercial bank reserves, facilitating government financing needs during the pandemic but shortening liability maturity and increasing interest rate risk.
- Liability-side risks:
  - Interventions funded by issuance of interest-bearing central bank debt (or reliance on short-term interest-bearing liabilities) magnify financial risks facing central banks and can materially affect central bank net income when interest rates rise.
- Overall:
  - Counterparties of crisis interventions typically receive an implicit subsidy, since eligibility criteria of unconventional schemes provide preferential treatment to participants.

### Risk mitigation, governance, and fiscal coordination
- Risk mitigation provisions observed in practice:
  - Use of repos or swaps instead of outright purchases.
  - Setting exposure caps and tight eligibility criteria.
  - Enhancing asset management expertise.
  - Sunset clauses and asset swaps with the government or private sector in some cases to mitigate risks and increase transparency.
- Measures to promote accountability:
  - Timely and transparent reporting.
  - Proper accounting treatment.
  - Strong central bank governance.
- Role of the fiscal authority:
  - Fiscal authorities in several countries played an active role in risk management, including providing robust fiscal backstops and enhancing oversight and policy coordination.
  - Government indemnities for specific liquidity support operations were relatively common.
  - Comprehensive central bank recapitalization frameworks covering a wide set of risks were not common.
  - Strengthened external oversight procedures and reporting requirements were adopted in some countries.
- Institutional allocation of intervention tasks:
  - Similar operations were implemented by central banks in some countries and by fiscal authorities in others (e.g., purchases of mortgage-backed securities).
  - Government implementation of some crisis interventions can be successful and may allow more transparent and effective management of fiscal risks.
  - Where feasible, government implementation can limit assets with quasi-fiscal components on the central bank’s balance sheet and help safeguard operational autonomy for core mandates.

### Policy implications and good-practice principles
- Identify quasi-fiscal components of interventions using a balance sheet approach to assess impacts on fiscal accounts and public-sector balance sheets.
- Design interventions with clear accountabilities, appropriate policy coordination, strong fiscal and central bank transparency, and adequate central bank balance sheet protection.
- Use risk mitigation measures (repos/swaps, exposure caps, eligibility criteria) and strengthen asset management capacity when central banks undertake non-traditional asset holdings.
- Ensure fiscal backstops or indemnities where central banks assume significant quasi-fiscal risks; consider whether some interventions are better conducted on the government balance sheet.
- Enhance oversight and reporting to improve transparency and manage contingent fiscal liabilities arising from central bank crisis interventions.

*Quasi-Fiscal Implications of Central Bank Interventions — Executive Summary, IMF Working Paper*

### Box 1 discusses interest rate risks from central

### Box 1 — Interest rate risks from central bank purchases of government securities

### Risks to public debt management
- Issuance of very short-term central bank debt securities to finance non-core assets can complicate public debt management, which is conventionally the responsibility of the government.20
- When a central bank issues debt into the same market as the Treasury, it can lead to segmentation in the market for public securities, creating market inefficiencies.
- Large-scale central bank purchases of long-dated government bonds financed with overnight interest-bearing instruments (a typical feature of recent QE programs) reduce the average duration of consolidated public debt held by the market, while increasing the risk profile of consolidated public debt.
- These purchases can prevent a steep increase in sovereign yields and so provide space for additional crisis fiscal measures; however, when central banks do not coordinate these operations with their respective Treasury, it can lead to inefficiencies in sovereign debt management.21
- Example: In the case of Chile’s central bank, most of the financing of its balance sheet comprises central bank securities, and it devotes considerable attention to debt management activities, which are normally the province of the government.20

### Implicit subsidies and taxes
- Counterparties of central banks’ crisis interventions typically receive an implicit subsidy.
- The eligibility criteria of unconventional schemes by nature provide preferential treatment to participants—for example, firms able to access financial non-financial market support facilities, or the private companies whose securities are eligible for purchase by the central bank.22
- Similar to LOLR, these arrangements can raise questions about whether the schemes were designed to favor certain banks or firms.

### Notable example and context
- The Federal Reserve’s Secondary Market Corporate Credit Facility purchased debt securities of 86 companies rated BB and above in March 2020, including Coca Cola, Walmart and McDonalds.22
- Quoted observation: Mervyn King suggested central banks become the “pawnbroker for all seasons,” standing ready to lend to “anyone” with adequate collateral.17

*IMF Working Papers — Quasi-Fiscal Implications of Central Bank Interventions*

### Box 1. Fiscal Risks from Central Bank Holdings of Government Securities

### Box 1. Fiscal Risks from Central Bank Holdings of Government Securities

### Key findings on interest rate and fiscal risk
- Large-scale central bank purchases of government bonds through quantitative easing (QE) transferred considerable interest rate risk from private investors onto the consolidated sovereign balance sheet.
- QE often replaced higher coupon fixed-rate debt with very short-term floating rate liabilities (bank reserves), producing a temporary cash-flow improvement described as a “fiscal illusion” because it was not risk-adjusted.
- Interest-rate risk on consolidated public sector balance sheets increased dramatically in some cases.
- A sharp increase in policy and market rates in 2022 revealed the risk-adjusted reality:
  - Interest payments on very short-term floating rate debt soared, placing many central banks in a negative net income position and sharply reducing financial transfers to governments.
  - The US and UK central banks began to make cash losses on their stock of asset purchases in 2022, which are expected to continue for some time.

### Accounting considerations and timing of losses
- Timing of capital losses depends on institutional accounting practices; recognizing losses up front (marked to market) yields a much larger immediate effect than recognizing them gradually.
- Example: in 2022 the Fed reported a $807 billion unrealized loss on its holdings of Treasury securities (and a $1.2 billion loss on its overall holdings).
- Two accounting methods for interest rate increases on central bank finances:
  - Flow method: recognizes losses gradually over time as they are realized in cash flow.
  - Stock method: recognizes valuation losses immediately in the profit and loss statement.
- Both methods have a similar long-run impact; the primary difference is timing.
- Valuation practices vary:
  - Some central banks (Banks of England and Canada) value QE assets at market prices and would see immediate valuation changes under the stock method.
  - Most central banks (including the Fed, ECB and BoJ) value QE assets at amortized value, not recognizing unrealized profits or losses, on the expectation of holding securities to maturity.

### Mechanisms amplifying fiscal exposure
- Large “excess” reserve holdings can create implicit taxes on the financial sector; before the GFC such holdings were rare or immaterial.
- With many commercial banks now holding trillions in excess reserves at major AE central banks, reserve remuneration has significant fiscal dimensions.
- Even with appropriate reserve remuneration, inclusion of central bank reserves in regulatory leverage ratios can penalize banks holding large reserves.
- Securities purchases provide an implicit subsidy to sellers by bidding up secondary market prices.

### Risks on exit and legacy balance sheet impacts
- Exiting crisis interventions can leave a large quasi-fiscal central bank balance sheet persisting long after a crisis ends.
- Crisis-related assets may remain on central bank balance sheets for years:
  - Long-term repos can have durations of several years; some exposures may become non-performing if collateral is inadequate.
  - Reselling purchased securities may generate financial losses or market-price volatility (e.g., “taper tantrums”), prompting holding to maturity.
- A larger central bank balance sheet can:
  - Create potential for large operational losses as interest rates rise, possibly making the central bank reluctant to raise rates even when justified.
  - Make it difficult to reduce excess bank reserves, weakening control over monetary policy implementation.
- Government pressure may arise to limit yield increases in longer-dated asset classes.

### Additional risks for emerging and developing economies (EMDEs)
- EMDEs face larger fiscal risks from central bank interventions relative to advanced economies (AEs) due to:
  - Shallower financial markets and more illiquid collateral, making unwinding interventions harder without market turbulence.
  - Need to manage collateral for longer and under more difficult conditions, increasing financial, operational and reputational risks.
  - Fiscal constraints that can result in insufficient government support, central banks operating close to the margin or with negative equity.
- Central bank financial weakness can impair attainment of core policy objectives and generate negative macro-fiscal feedback loops.
- Operating with negative equity does not eliminate fiscal risks:
  - Large non-core losses may be financed via equity buffers or government transfers, both implying fiscal costs.
  - Central banks may finance negative equity by issuing additional central bank debt, which can also have fiscal costs (for example, by jeopardizing the central bank’s ability to achieve core policy mandates — “policy insolvency”).

### Implications highlighted in supporting evidence and examples
- The 2019 UK Fiscal Risks Report noted the BoE’s APF purchases increased the share of public sector debt maturing in less than one year from 20 to 40 percent, increasing interest rate risk.
- Federal Reserve and Bank of England reporting in 2022–2023 documented suspension of Treasury remittances and cash losses on asset purchase facilities:
  - By September 2022, most Reserve Banks had suspended weekly remittances to the Treasury.
  - In the UK, the Treasury made its first transfer to the indemnified APF in October 2022; BoE estimates suggest cumulative APF cash flows could decline from £100 bn in 2022 to -£100 bn by 2033, and could exceed -£150 bn if interest rates increase by 1 percent above the market path.

*Source: Box 1. Fiscal Risks from Central Bank Holdings of Government Securities (wpiea2023114-print-pdf).*

### Section II highlighted the various forms of financial risk (credit, market, interest rate) associated with central

### wpiea2023114-print-pdf - Section II highlighted the various forms of financial risk (credit, market, interest rate) associated with central

### Financial risks from central bank crisis interventions and design features to limit them
- Central bank crisis interventions create credit, market, and interest rate risks that are ultimately borne by the fiscal authority, even if the central bank bears the immediate risk.
- Interventions can deliberately transfer risk from the private to the public sector (purchases of corporate securities) to improve market functioning; policymakers must balance risk mitigation with policy effectiveness and the strength of the public sector’s balance sheet.
- Design features that can help limit financial risks include:
  - Use of repos or swaps over outright purchases to limit outright ownership of securities and keep risks on private balance sheets (e.g., Mexico). Short maturities can limit credit risk and increase policy flexibility. Outright purchases transfer risks to the public sector balance sheet.
  - Exposure caps and eligibility criteria to limit potential losses, including:
    - caps on the aggregate size of interventions to limit maximum exposure (e.g., Chile, Sweden 39);
    - eligibility criteria to avoid supporting insolvent institutions or “picking favorites”;
    - appropriate fees and haircuts on higher-risk securities; and
    - appropriate collateral requirements in the case of repos or other lending (e.g., the Eurosystem, Chile 42).
  - Examples of numeric caps and measures:
    - Chile’s asset purchase program was capped at USD 8.0 billion.
    - Sweden’s asset purchase program was capped at SEK 700 billion.
    - The Eurosystem reduced collateral valuation haircuts by a fixed 20 percent.
  - Sunset clauses and the use of repos to facilitate unwinding crisis assets: explicit expiry dates (many Covid-19 liquidity support operations expired within one year); repos ease unwinding and balance sheet reduction compared with fixed-rate coupon bond purchases.
  - Enhancing asset management capabilities where central banks hold complex portfolios: ringfencing assets in an SPV or VIE, setting up a Sovereign Wealth Fund equivalent, or bringing external expertise (e.g., US Fed brought external operational assistance to help manage the CPFF 45).

### Fiscal risk management frameworks and fiscal backstops
- Strong arguments exist for the fiscal authority to directly bear financial risks from central bank balance-sheet interventions, through assuming assets/liabilities onto the government balance sheet or providing guarantee mechanisms.
- A ‘fiscal backstop’ has been provided via government deposits, guarantees, an SPV, or loss provisioning mechanisms 46.
- Country examples and numeric references:
  - Bank of Canada indemnified some programs through injections of government deposits of around 3 percent of GDP, while the interest rate risk from its QE program was subject to derivatives agreements with the Government.
  - In the US, of 13 credit facilities introduced by the Fed in 2020, the Treasury provided capital support amounting to 0.5 percent of GDP at end-2020 to the 9 structured as SPVs; the other 4 facilities received support through the Treasury Exchange Stabilization Fund (ESF), or took fully government-guaranteed loan collateral.
  - In New Zealand, the Treasury provided an indemnity for the central bank’s Large-Scale Asset Purchase Program and in 2022 began payments to the central bank to offset net interest income losses related to bonds bought in 2021 and 2022.
- Design options for financial arrangements between central bank and fiscal authority include risk-based capital policy (UK example), loss provisioning by the fiscal authority, or holding “excess” central bank capital. Many central banks have limited buffers and weak or non-existent recapitalization frameworks 52.

### Central bank governance, transparency, and accounting
- Clear central bank mandates authorizing crisis interventions promote accountability; explicit objectives in legislation, regulations, or formal agreements strengthen transparency.
- Enhancing internal oversight when adopting new crisis instruments may include increased Board or non-executive director involvement, more frequent review by legal, risk management, and internal audit functions 55–56.
- Transparent reporting and ex-post impact assessments were common during Covid-19 among many advanced economy central banks; some emerging markets (e.g., Chile) also provided detailed disclosures 57.
- The IMF’s Central Bank Transparency Code recommends publishing regular, timely, and easily accessible reports on size, terms, financial flows, impacts, and official relations with government 58.
- Proper accounting treatment per internationally recognized standards (e.g., IFRS) requires determining whether the central bank acts as agent (assets/liabilities on government balance sheet) or owns/controls the assets (central bank balance sheet). If on the central bank balance sheet, additional quantitative and qualitative disclosures are often warranted. Only about a quarter of the world’s central banks currently apply IFRS (IMF, 2021).
- Good fiscal authority disclosure practices should cover potential fiscal impact and risks of central bank crisis interventions, including implicit subsidies, contingent liabilities, and direct/indirect flows between government and central bank; publication outlets can include budget documents, fiscal risk statements, and central bank reports.

### Oversight, monitoring, coordination, and safeguards for independence
- Enhanced external oversight, monitoring, and data-sharing arrangements are warranted given the fiscal risks of central bank crisis operations; however, oversight should not infringe on central bank independence over monetary policy.
- Examples of oversight and coordination mechanisms:
  - UK: Bank of England applies to the Treasury to increase the indemnity associated with asset purchase programs.
  - New Zealand: MoU clarifying process for requesting indemnity and new principles for central bank operations considering Crown balance sheet impact.
- Coordination roles of the fiscal authority where it provides a backstop can include contributing ex-ante to eligibility criteria, risk management practices, and high-level implementation decisions (e.g., termination or extension of programs).
- Comprehensive sovereign asset-liability management frameworks (public sector balance sheet, PSBS) can inform fiscal management and mitigate fiscal risks from central bank crisis interventions (examples: Australia, New Zealand, UK, Uruguay).
- Coordination on debt management is important when central bank purchases of government securities interact with government issuance decisions; examples:
  - Canada: central bank bought long-term securities while government increased issuance of the same tenor.
  - US: Federal Reserve took government securities out of the market while the Treasury overissued and accumulated large deposits at the central bank.
- Institutional arrangements for coordination vary: legislation-defined coordination bodies, MoUs, SLAs, or ad-hoc cooperation; safeguards must preserve monetary policy autonomy (UK example: Chancellor can extend/terminate asset purchase program, MPC decides on its size).

### Facilitating exit and managing exit risks
- Promptly winding down central bank holdings of crisis assets after conditions normalize can mitigate risks, enhance transparency, and reduce distortive effects of excess reserves on financial intermediation and sovereign debt management.
- Policies to facilitate exit include:
  - Transferring private sector assets to the government balance sheet for gradual liquidation; asset-liability swaps between central bank and Treasury can protect central bank balance sheet by exchanging risky private assets for government debt of same maturity (subject to gross government debt sustainability). Valuation losses should be accounted for properly in fiscal accounts.
  - Gradual conversion of central bank holdings of government securities into short-term bills so the Treasury’s debt office manages disposal; example: New Zealand began selling government bonds to the Treasury starting in 2022. Short-term bill portfolios allow quicker roll-off and typically face deeper markets, reducing price impacts from sales.
  - Transparency over duration of liquidity provision and conditions for extension to mitigate moral hazard.
- Trade-offs: actively bringing crisis assets off the central bank balance sheet does not imply selling on the secondary market if that would increase losses; alternatives include swaps or transfers to the Treasury or SPV. Exit difficulties can be pronounced in EMEs with illiquid markets and limited fiscal space for recapitalization.

### Key statistics and numeric references (preserved exactly as in source)
- Chile’s asset purchase program was capped at USD 8.0 billion.
- Sweden’s asset purchase program was capped at SEK 700 billion.
- The Eurosystem reduced collateral valuation haircuts by a fixed 20 percent.
- Bank of Canada injections of government deposits of around 3 percent of GDP.
- US Treasury capital support amounting to 0.5 percent of GDP at end-2020 to 9 SPV-structured facilities (of 13 Fed facilities introduced in 2020).
- Many Covid-19 liquidity support operations expired within one year.
- Only about a quarter of the world’s central banks currently apply IFRS (IMF, 2021).
- PIMCO selected as investment manager and State Street Bank as custodian and accounting administrator in March 2020 for US Fed operational assistance managing the CPFF 45.

*IMF WORKING PAPERS Quasi-Fiscal Implications of Central Bank Interventions — Section II (excerpts provided in source content)*

### Annex I. Quasi-Fiscal Concepts

### Annex I. Quasi-Fiscal Concepts

### Definition and scope
- A central bank activity has a quasi-fiscal component when it impacts materially the fiscal accounts, and/or affects other aspects of fiscal policy (tax, spending, financing), either directly, or in the future.
- The concept is similar to Mackenzie and Stella (1996): quasi-fiscal activity are policies by public institutions (financial and non-financial) that affect the overall public sector balance without affecting the budget deficit as conventionally measured.
- Some central bank activities always have a quasi-fiscal component; others may or may not, depending on implementation.
- Fiscal effects may be:
  - Immediate or not obvious;
  - Actual or contingent (potential future effects);
  - Direct or indirect (e.g., via institutional changes).

### Direct fiscal channels and central bank losses
- Central bank activities impact fiscal accounts mainly when they create financial losses for the central bank, which can lead to:
  - Lower dividends for the government.
  - Potential current or future need for recapitalization by the fiscal authority.
- When central bank equity is positive, a decline in profitability reduces transfers (dividends) to government.
- When equity is negative, dividends are usually suspended and the treasury may need to recapitalize the central bank.
- Losses can be actual or future (particularly when activities create contingent liabilities).

### Indirect fiscal and institutional channels
- Activities that erode central bank autonomy can indirectly worsen fiscal outcomes by:
  - Constraining monetary policy, contributing to higher inflation, capital outflows, and depreciation—especially where monetary credibility is weak.
  - Increasing the public sector’s exposure to financial risks if they affect the cost of financing public debt.
- Institutional risks: loss of central bank credibility can impair policy effectiveness if markets believe the central bank may be unable or unwilling to pursue appropriate policy when sovereign vulnerabilities materialize (Stella, 2005).

### Resource allocation, implicit taxes/subsidies, and transparency
- Central bank activities can create implicit taxes and subsidies that affect resource allocation and lead to distortions when conducted at non-market prices or with differential treatment of firms/sectors.
- If such implicit taxes/subsidies and/or grants are not quantified and accounted for:
  - They can reduce the efficiency and transparency of fiscal policy.
  - When subsidies/grants sit on the central bank balance sheet, it impedes direct comparison with other budgetary expenditure items, creating an institutional risk of the fiscal authority losing control of expenditure and budgetary priorities.

### Effects on public debt structure and sovereign debt management
- Central bank actions can alter the structure of public debt or the market for government securities, potentially impeding sovereign debt management objectives.
- Possible outcomes:
  - Changes in debt structure can affect the government’s objective to minimize financing costs subject to a given level of risk (if uncoordinated with the Treasury).
  - They can also ease government financing conditions (e.g., quantitative easing).
  - If the central bank issues its own debt securities, these can compete with government securities in the market for risk-free assets.

*Illustration (from Annex Figure AI.1):*
- Fiscal Accounts: Impacts (negatively) the central bank’s operational balance → lower dividends for the government; potential current or future need for recapitalization by the fiscal authority.
- Broader Fiscal Impact: An implicit tax or subsidy, affecting resource allocation and the efficiency of fiscal policy; changes the structure of sovereign debt, impacting public debt management.
- Impact can be direct or indirect, actual or potential.

### Stylized central bank balance sheets (linking concepts to accounting)
- Non-quasi-fiscal core central bank balance sheet (Annex Table AII.1) variables and identities:
  - Assets: Treasury Securities TS = B + A; Liquidity Providing Repos LPR = R + TSA; Bank Reserves R; Payments System Infrastructure P; Total Assets TA.
  - Liabilities: Banknotes Outstanding B; Treasury Single Account TSA; Equity (Treasury) E = P + A; Total Liabilities TL.
  - Where A = cumulative previous operational balances OB = i(TS) - dP – W and W = wages and other operating expenses.
  - Assumptions noted: interest rate on LPR equals interest on R and TSA; interest on TS > interest on B (=) and demand for B is stable.
  - Core functions: interbank payment system, banknote issuance, banker to the government, implementing monetary policy.
  - Monetary operations are passive: total assets determined by market demand for B and R given government choices for TSA and P.

- Pre-GFC quasi-fiscal central bank balance sheet (Annex Table AII.2) variables and identities:
  - Assets: Treasury Securities TS - γL; Liquidity Providing Repos LPR - αL; LOLR to Bank Z LOLR = L; FX reserves FX; Total Assets TA.
  - Liabilities: Banknotes Outstanding B; Bank Reserves R + L; Liquidity Withdrawing Repos LWR + βL; Other Interest-bearing Liabilities CBD + δL; Treasury Single Account TSA; Equity (Treasury) P + A; Total Liabilities TL.
  - NB α + β + γ + δ = 1 assuming the CB aims to leave R unchanged, B, E & TSA exogenous.
  - Offsetting measures, if temporary, follow sequence α, β, γ, δ.
- Pre-GFC activities with quasi-fiscal potential highlighted:
  - Lender of last resort (LOLR): higher financial risk than LPR; credit is provided on non-market terms; raises questions of preferential treatment and resource allocation.
  - FX reserves: low-yielding FX assets funded by more expensive interest-bearing debt can lead to financial losses; exchange rate fluctuations cause valuation gains/losses affecting profitability and dividend flows.

- Systemic financial crisis / Zero Lower Bound (ZLB) central bank balance sheet (Annex Table AII.3) variables and identities:
  - Assets: Treasury Securities TS + TS_crisis; Private Securities PS; Liquidity Providing Repos LPR + LPR_crisis; LOLR to Bank Z LOLR + LOLR_crisis; Financial Market Support Facility FMS; Nonfinancial Support facilities NFS; Net other assets (inc FX reserves) NOA + NOA_crisis; Payments System Infrastructure P; Total Assets TA.
  - Liabilities: Banknotes Outstanding B; Bank Reserves R + H; Liquidity Withdrawing Repos LWR + α(X - H); Other Interest-bearing Liabilities CBD + β(X - H); Treasury Single Account TSA + γ(X - H); Operational Balance (in-year) OB; Specific Treasury Support S + δ(X - H); Equity (Treasury) E; Total Liabilities TL.
  - NB α + β + γ + δ = 1 with ΔR = H and B, OB & E exogenous.
  - X = TS_crisis + LPR_crisis + LOLR_crisis + PS + FMS + NFS.
  - Note: If H = X, then there is no other net expansion in liabilities and interventions are financed entirely by reserve creation.
  - Definitions: FMS denotes financial market support facilities, NFS denotes non-financial market support facilities, PS denotes purchases of private securities, TS denotes purchases of government securities.
- When operating at the ZLB:
  - No need to ensure ΔR = 0; unconventional activities can be funded by creation of new bank reserves (ΔR = H > 0).
  - Assets from crisis-scale interventions (PS, TS, FMS, NFS) may be funded by liquidity-withdrawing repos, issuance of central bank debt (CBD), money creation (R + H), and specific treasury support S + δ(X - H) if the Treasury provides equity.
- When operating above the ZLB:
  - Increases in unconventional assets must be offset to maintain reserves in equilibrium; financing options include:
    - Reductions in other assets (e.g., sales of existing TS);
    - Increases in liabilities other than commercial bank reserves (e.g., issue interest-bearing debt instruments);
    - Coordination with the Treasury so it absorbs additional liquidity (e.g., issuance of additional treasury bills).

*Italic source attribution: IMF WORKING PAPERS — Quasi-Fiscal Implications of Central Bank Interventions, Annex I & Annex II.*

### References

### References (wpiea2023114-print-pdf)

### Overview
- Bibliographic compilation of works cited in "Quasi-Fiscal Implications of Central Bank Interventions" and associated case studies.
- Includes academic articles, IMF working papers and policy papers, central bank reports, BIS papers, government press releases, and staff discussion notes.
- Coverage emphasizes central bank finance, quasi-fiscal operations, crisis interventions, monetary–fiscal nexus, and related governance, transparency, and risk-management issues.

### Major referenced themes
- Central bank finances, capital, and financial strength (multiple works by Stella; Ize (2005); Khan (2016, 2018)).
- Quasi-fiscal operations and implications (Mackenzie & Stella (1996); Piekarz (1987); Battersby et al. (2022)).
- Crisis interventions and central bank crisis response, including Covid-19 measures (Cavallino & De Fiore (2020); Fernandes & Mueller (2023); Arseneau et al. (2021); Australian Treasury (2020)).
- Monetary–fiscal nexus and policy interactions (European Parliament (2020); Agur et al. (2022); Greenwood et al. (2014, 2015)).
- Reserve management, debt management, and seignorage (IMF (2001); McCauley & Ueda (2009); Reis (2015)).
- Legal, governance, and transparency frameworks for central banks (Khan (2018); IMF Central Bank Transparency Code (2020); HM Treasury memorandum (2018)).

### Selected cited works (authors, title, outlet, year, identifiers where given)
- Agur, I., D. Capelle, G. Dell’Ariccia, and D. Sandri (2022), ‘Monetary Finance: Do Not Touch, or Handle with Care?’ IMF Departmental Papers, no 2022/001.
- Archer, D and P Moser-Boehm (2013): “Central bank finances”, BIS Papers, no 71, April.
- Arseneau, David, José Fillat, Donald Morgan, Molly Mahar, and Skander Van den Heuvel (2021), “The Main Street Lending Program,” Federal Reserve Bank of Boston Current Policy Perspectives, September.
- Australian Treasury (2020), “Government to invest up to $15B in support of SME lending,” Press Release, March 19, 2020.
- Bank of England (2021), Bank of England Asset Purchase Facility Fund Limited Annual Report and Accounts 2020/2021.
- Battersby, B, R. Espinoza, J. Harris, G. Hee Hong, S. Lizarazo Ruiz, P. Mauro, A. Sayegh (2022), “The State as Financier of Last Resort”, IMF Staff Discussion Note, No. 2022/003.
- Belton, Terrance J. et. al. (1987), Daylight Overdrafts and Payments System Risk, Federal Reserve Bulletin, Federal Reserve System, November.
- Bindseil, Ulrich (2004), “Monetary Policy Implementation: Theory, Past, and Present,” Oxford University Press.
- Board of Governors of the Federal Reserve System (2009), "The Role of the Federal Reserve in Preserving Financial and Monetary Stability Joint Statement by the Department of the Treasury and the Federal Reserve." Press Release, Board of Governors, March 23.
- Borio, Claudio (2011), ”Central banking post-crisis: What compass for uncharted waters?,” BIS Working Papers, No 353.
- Buiter, Willem (2020a), Central Banks as Fiscal Players, Cambridge University Press, November.
- Buiter, Willem (2020a), “Three strikes against the Fed,” VoxEU Column, July.
- Canadian Mortgage and Housing Corporation (2015,) Annual Report.
- Cavallino, P and Fiorella De Fiore (2020), "Central banks' response to Covid-19 in advanced economies," BIS Bulletins 21.
- Das, Udaibir; Yinqiu Lu, Michael Papaioannou, Iva Petrova (2012), “Sovereign Risk and Asset and Liability Management: Conceptual Issues,” IMF Working Paper 12/241.
- Debelle, Guy (2009), “Whither Securitisation,” Address to the Australian Securitisation Conference, Reserve Bank of Australia, 18 November.
- European Parliament (2020), “Monetary-Fiscal Nexus After the Crisis,” Study commissioned by the European Parliament’s ECON Committee, November.
- Fernandes, Joshua, and Michael Mueller (2023), “A Review of the Bank of Canada’s Support of Key Financial Markets During the Covid-19 Crisis,” Bank of Canada Staff Discussion Paper, 2023/9, April.
- Gjedrem, Svein (2009), “Experiences with the financial crisis,” presentation, 30 September 2009.
- Goodhart, C. (1999), “Myths about the Lender of Last Resort,” International Finance 2:3, 1999, page 348.
- Gray, Simon (2011), “Central Bank Balances and Reserve Requirements,” IMF Working Paper 11/36.
- Greenwood, Robin; Samuel G. Hanson, Joshua S. Rudolph, Lawrence H. Summers (2014), “Government Debt Management at the Zero Lower Bound,” Hutchins Center Working Paper, No. 5.
- Greenwood, Robin, Samuel Gregory Hanson, Joshua S. Rudolph, and Lawrence Summers (2015), "Debt Management Conflicts between the U.S. Treasury and the Federal Reserve." Chapter 2 in ”The $13 Trillion Question: How America Manages Its Debt,” pp 43–89.
- Hardy, Daniel (1993), “Reserve Requirements and Monetary Management: An Introduction,” IMF Working Paper, 93/35.
- HM Treasury (2018), Financial relationship between HM Treasury and the Bank of England: memorandum of understanding, June.
- Hooley, John; Claney Lattie, Peter Stella (2023), “Quasi-Fiscal Implications of Central Bank Crisis Interventions: Case Studies,” IMF Working Paper, 23/115.
- IMF (2001), Guidelines for Foreign Exchange Reserve Management.
- IMF (2015), Evolving Monetary Policy Frameworks in Low-Income Countries and other Developing Countries.
- IMF (2016). “Analyzing and Managing Fiscal Risks—Best Practices,” IMF Policy Paper.
- IMF (2020), Central Bank Transparency Code.
- IMF (2018). “Managing Public Wealth.” IMF Fiscal Monitor.
- IMF (2019), “The Fiscal Transparency Code.”
- IMF (2020), Sweden: Technical Assistance Report – Proposed Amendments to the Riksbank Act. IMF Country Report 2020/239.
- IMF (2022, forthcoming`), The State as Financier of Last Resort, IMF Staff Discussion Notes No. 2022/003.
- Ize, Alain (2005), Capitalizing Central Banks: A Net Worth Approach, IMF Staff Papers Vol. 52 # 2.
- Khan, Ashraf (2016), Central Bank Governance and the Role of Nonfinancial Risk Management. IMF Working Paper 16/04.
- Khan, Ashraf (2018), Central Bank Legal Protection, Liability, and Immunity Arrangements. IMF Working Paper 18/178.
- Mackenzie G.A., Stella P., (1996), Quasi-fiscal operations of Public Financial Institutions, IMF, Occasional Paper No. 142.
- McCauley, Robert, and Kazuo Ueda (2009), Government debt management at low interest rates, BIS Quarterly Review, June 2009.
- Piekarz, J. (1987), ‘El Deficit Cuasi Fiscal Del Banco Central’, Banco Central de la Republica Argentina, August.
- Reis, Ricardo (2015), "Different types of central bank insolvency and the central role of seignorage," CEPR Discussion Papers, No. 10693.
- Rogoff, Kenneth (2021), “Risks to Central Bank Independence.” In Independence, Credibility and Communication of Central Banking.
- Stella, Peter (1997), “Do central banks need capital?”, IMF Working Paper, no 97/83, July.
- Stella (2003), “Why central banks need financial strength”, Central Banking, vol 14, no 2, November.
- Stella (2005), “Central Bank Financial Independence and Policy Credibility,” IMF Staff Papers vol. 52 no. 2, Special Section.
- Stella (2008), “Central bank financial strength, policy constraints and inflation”, IMF Working Paper 08/49.
- Stella and A Lonnberg (2008): “Issues in central bank finance and independence”, IMF Working Paper 08/37.
- Stella and Ulrich Klueh (2008), “Central Bank Financial Strength and Policy Performance: An Econometric Evaluation,” IMF Working Paper 08/176.
- Stella (2010), “Minimising Monetary Policy,” BIS Working Paper, No. 330.
- Stella (2011): “Central bank financial strength and macroeconomic policy performance”, in S Milton and P Sinclair (eds), The Capital Needs of Central Banks, Routledge.
- Stella (2020), “How Countries Manage Large Central Bank Balance Sheets,” Chapter 4, Asset Management at Central Banks and Monetary Authorities, ed. Jacob Bjorheim, Springer.
- US Treasury (2008), “Treasury Announces Supplementary Financing Program,” US Treasury Press Release, 17 September.

### Notable document and working-paper identifiers cited
- IMF Departmental Papers, no 2022/001.
- BIS Papers, no 71.
- IMF Staff Discussion Note, No. 2022/003.
- IMF Working Paper 12/241.
- IMF Working Paper 11/36.
- IMF Working Paper 93/35.
- IMF Country Report 2020/239.
- Bank of Canada Staff Discussion Paper, 2023/9.
- IMF Working Paper 16/04.
- IMF Working Paper 18/178.
- IMF Occasional Paper No. 142.
- IMF Working Paper 08/49.
- IMF Working Paper 08/37.
- IMF Working Paper 08/176.
- IMF Working Paper, 23/115.
- CEPR Discussion Papers, No. 10693.
- BIS Working Papers, No 353.
- BIS Working Paper, No. 330.

*Source: wpiea2023114-print-pdf - References*

---


_Source: https://www.imf.org/-/media/files/publications/wp/2023/english/wpiea2023114-print-pdf.pdf_