Practices 

In addition to core practices:

The central bank discloses to the public specific and detailed information describing its Legal Framework, its Legal nature, and its Legal protection.

1. Legal Framework

The central bank discloses: (i) an updated and consolidated central bank law; and (ii) a broad description of (a) its Legal Framework; (b) its Objectives, Functions, and Powers; and (c) the source of its Objectives, Functions, and Powers.

The Legal Framework disclosed by the central bank is clear on which law prevails in the event that the provisions of the central bank law conflict with those of other laws.

The central bank law disclosed by the central bank clearly defines any transitional arrangements which are limited in time.

In addition to core practices:

The Legal Framework which the central bank adopts with respect of financial institutions is disclosed.

In addition to expanded practices:

The central bank communicates and discloses in advance if and when it plans to review its framework, and also how it will engage with stakeholders for possible input.

The central bank discloses specific information on its Legal Framework.

2. Legal nature

The ownership and Legal nature (e.g., established pursuant to company law; corporation of public law, sui generis institution) of the central bank are disclosed. This includes its general Legal capacity to: (i) enter into contracts; (ii) institute legal proceedings and be subject to such proceedings; and (iii) acquire, administer, hold and dispose of movable and immovable property.

The legal instruments that are available to a central bank, i.e., non-binding instruments (recommendations), and legally binding instruments, irrespective whether they are generally applicable or are addressed to specific legal, or natural persons are disclosed.

The central bank discloses the central bank law which establishes (i) its Legal nature; (ii) its ownership; (iii) its general Legal capacity to act; and (iv) its legal instruments.

Insofar as the central bank has private shareholders, the central bank clearly discloses the decision-making Powers of the general meeting of shareholders.

In addition to core practices:

The central bank’s Articles of Association/Statute/By-Laws (if any) and the Rules of Procedure governing its Decision-making Bodies (if any) are disclosed.

The central bank discloses specific information on its Legal nature, its ownership, its general Legal capacity to act, and its legal instruments.

Details on the central bank’s legal instruments are Disclosed.

3. Legal protection

The central bank’s Legal protection is disclosed.

Note that this is linked to the disclosure of the Legal protection for central bank officials and staff members (see section 1.3.3. on personal Autonomy). 

The central bank discloses the central bank law which clarifies whether the central bank is protected from pre-judgment attachments.

In addition to core practices:

The central bank discloses specific information on its Legal protection. 

The central bank has a clear Mandate—articulated in a set of Objectives, Functions, and legal Powers—that enable it to carry out its objective(s).

The central bank’s mission statement is consistent with its stated Mandate.

The central bank’s mission statement is disclosed.

In addition to core practices:

The central bank discloses specific information on the legal provisions regarding its Mandate.

The specific Functions and legal Powers behind each central bank objective, which can vary by institution, are clearly defined.

In addition to expanded practices:

Insofar as the degree of central bank Autonomy varies with respect to its different Objectives, such variance is disclosed.

1. Objectives

In addition to core practices:

The central bank discloses the legal foundation of its Objectives.

When the central bank has multiple Objectives, the central bank discloses the mechanism for determining which objective prevails.

In addition to expanded practices:

Insofar as the degree of central bank Autonomy varies with respect to its different Objectives, such variance is defined and disclosed.

The central bank discloses details of its quantified Objectives (if any).

The central bank discloses any other relevant information on its Objectives.

2. Functions

In addition to core practices:

The central bank discloses the legal foundation of its Functions.

In addition to expanded practices:

The central bank discloses any other relevant information on its Functions.

3. Powers

In addition to core practices:

Prohibitions which prevent the central bank from conducting specific activities are disclosed. 

Insofar as the central bank has any general incidental or ancillary Powers the scope thereof is clearly explained and disclosed.

The central bank discloses specific information its Powers, as well as prohibited activities.

1. 1.3.1. Institutional/ Operational⁶

In addition to core practices:

The central bank discloses if representatives of third parties (i) can attend central bank Decision-making Bodies; and (ii), if so, are excluded from voting when participating in central bank Decision-making Bodies.

The central bank discloses the role and scope of audits conducted by state audit bodies, if and where relevant.

The central bank discloses what its institutional/operational Autonomy consists of, how this is implemented in practice, and what it sees as the rationale for this Autonomy.

The central bank discloses whether third parties are prohibited to approve, suspend, annul, or defer central bank decisions.

The central bank clarifies how its monetary policy goal is determined (i.e., whether it has goal Autonomy) and whether it is autonomous in exercising such goal (i.e., whether it has instrument Autonomy).

In addition to core practices:

The central bank discloses and provides detailed information on any arrangements regarding the role of third parties to approve, suspend, annul, or defer its decisions.

In addition to expanded practices:

The central bank discloses what its functional Autonomy consists of, how this is implemented in practice, and what it sees as the rationale for this Autonomy.

It is clear whether members of the central bank’s

Decision-making Bodies have Security of Tenure. The central bank discloses the nature of such security, and the fit and proper requirements.

The central bank discloses the duration of the term of office for members of its

Decision-making Bodies, as well as the criteria and procedures for the appointment and dismissal of such officials.

Specifically, the central bank discloses which authorities are involved in the appointment and dismissal of members of its

Decision-making Bodies, the eligibility and incompatibility requirements, and the grounds and procedures for dismissal.

In addition to core practices:

The central bank discloses the regulations governing renumeration of members of its Decision-making Bodies as well as any detailed arrangements for its determination.

The central bank discloses and clarifies whether the central bank, members of its Decision-making Bodies, and employees can be liable for damages caused by any of their acts or omissions.

In addition to expanded practices:

The central bank discloses what its personal Autonomy consists of, how this is implemented in practice, and what it sees as the rationale for this Autonomy.

In addition to core practices:

The central bank discloses its regulations and decision-making procedures for (i) the determination of its budget; (ii) the creation of provisions, including general and special reserves; (iii) the accounting treatment of foreign exchange gains and losses; (iv) the rules on distribution of dividends to the government; and (v) the provisions for central bank recapitalization.

In addition to expanded practices:

The central bank discloses what its financial Autonomy consists of, how this is implemented in practice, and what it sees as the rationale for this Autonomy.

The central bank clarifies its organizational structure by means of disclosing the Functions of its Decision-making Bodies, and links to relevant central bank legislation or charters/by-laws.

The central bank also discloses aspects relating to the composition of its Decision-making Bodies, and the allocation of responsibilities across different Decision-making Bodies.

In addition to core practices:

The central bank discloses detailed information on the organization of it Functions (where applicable), including detailed organization charts of those Functions, as well as additional details on how Decision-making Bodies operate (e.g., voting arrangements, frequency of meetings, and how dissent is dealt with). The central bank discloses which decision-making body is responsible for general and for individual regulatory decisions.

In addition to expanded practices:

The central bank discloses Easily accessible details (e.g., CVs/biographies) of the members of its Decision-making Bodies, and that these are kept up to date.

In addition to core practices:

The central bank’s annual report contains a Risk Statement limited to certain types of risks or specific operations, and describes some risk strategies, such as collateralization and limits.

The central bank Legal Framework explicitly allocates responsibility for risk oversight and risk management among its Decision-making Bodies.

In addition to expanded practices:

The annual report provides a mapping of key risks to the central bank’s Mandate, and an explicit Risk Statement. Information on risk strategies is comprehensive and responsibilities along the Risk Management Process are further detailed in published regulations. Risk disclosures, including in annual financial statements, encompass quantified demands on the central bank’s financial resources and buffers, and high-level description of quantification methodologies.

2. Risk Exposure

The central bank’s annual report provides a high-level overview of key risks.

The central bank’s annual report and annual financial statements contain limited disclosures on risks.

In addition to core practices:

The central bank’s annual report provides a high-level overview of developments in key risks.

The central bank’s annual report contains a Risk Statement limited to certain types of risks or specific operations (e.g., investments).

The central bank’s annual report and annual financial statements disclose the level of and developments in the central bank’s risks exposures.

In addition to expanded practices:

The central bank’s annual report provides a high-level overview of key risks mapped to its Mandate, and the role of risk management in pursuit of its Objectives. The annual report also includes a section on developments in key risks.

The central bank’s annual report contains a Risk Statement outlining its stance on financial, operational, and other risks from its policy operations, investment operations, and other activities (e.g., currency management, banking, and payment systems).

The central bank’s annual report and annual financial statements disclose the level of (and developments in) its risks exposures, as well as associated quantified demands on its financial resources/buffers, including a brief description of the methodology used for quantification.

2. Risk Framework

In addition to core practices:

The central bank’s Legal Framework allocates responsibility for risk oversight and risk management among the central bank’s Decision-making Bodies.

The central bank’s annual report includes a description of the process of continuous identification, evaluation, and mitigation of risks.

The annual report describes one or more risk strategies, such as collateralization of lending activities and limits in investment operations.

In addition to expanded practices:

The responsibilities for risk oversight and risk management are disclosed further in central bank’s published internal regulations.

The central bank’s published internal regulations define the roles of organizational units and committees in the Risk Management Process.

The central bank’s annual report includes references to applicable standards and frameworks, including a high-level description of methodologies for quantifying risks.

The annual report describes risk strategies, such as acceptance or transfer of some risks and mitigation of others, i.e., collateralization of lending in policy operations, risk limits in investment operations, plans for business continuity and recovery, awareness programs on cyber security, and tools and internal controls for managing operational risks.

The annual report also highlights any developments in central bank’s Risk Framework.

The annual report also gives a high-level overview of the central bank’s policies and arrangements for times of crisis.

In addition to core practices:

Accountability arrangements and related tools utilizing recognized accounting and auditing standards and reporting practices (such as timely publication within the statutory deadline).

Disclosure of the scope of application of the code of conduct and an accountability mechanism for human capital management.

In addition to expanded practices:

Accountability arrangements containing clear and detailed provisions to ensure independent audits and high-quality financial reporting. In addition to the audited financial statements, the annual report includes a comprehensive discussion on the activities of the central bank. A report of the audit committee is published.

The central bank’s website discloses the scope of application of the code of conduct and how the staffing rules are incorporated into the central bank’s strategy.

The Legal Framework contains provisions for an external audit of the annual financial statements. It contains provisions on the publication of the audited annual financial statements and annual report.

The central bank discloses whether the annual financial statements are published separately or within the annual report.

The Legal Framework contains provisions to ensure audit quality and Independence. Provisions include (i) an external audit to be carried out by an independent firm of good repute with international experience; (ii) an audit conducted in accordance with international standards; (iii) an appointing authority (multi-year appointments and audit firm rotation periods); and (iv) oversight of performance by an audit committee.

In addition to expanded practices on preparation and publication of annual financial statements and an annual report, the Legal Framework also contains provisions on the frequency of the publication (e.g., weekly/monthly) of the balance sheet.

In addition to core practices:

Dual reporting lines to both senior management and the audit committee or central bank board are established.

In addition to expanded practices:

The appointment and dismissal, terms, and eligibility criteria for the head of the internal audit function are explicit.

In addition to core practices:

A mechanism for reporting is clearly established

The central bank discloses the rules governing the reporting by the audit committee (or another body), and for publication in the annual report.

In addition to core practices:

Publication of the annual financial statements is within the statutory deadline.

The central bank releases an audit opinion accompanying the financial statements and meets the statutory deadlines for publication.

Additional general information on performance, use of resources (including those used for non-core activities such as lending to the public sector and other quasi-fiscal activities, if any), and relationship with the government (see also Pillar V) is Publicly Available to stakeholders (e.g., in the annual report).

In addition to expanded practices:

The annual report includes a complete set of audited financial statements (which can also be separately published) and a comprehensive discussion on the activities of the central bank. This includes information on significant transactions and highlights for the period. This information should be clear and enable a user to assess performance, understand key transactions and operations, and identify emerging risks.

In addition to core practices:

The published annual report or the central bank’s website clarify the rules governing the Independence of the internal audit function and reporting structure, its conformance with international standards, and a high-level description of the function’s activities during the period.

In addition to expanded practices:

The published annual report or the central bank’s website also clarifies the rules governing the internal audit function and reporting structure and includes statements of conformance with international standards and basis for the function’s audit methodology. A high-level description of the function’s activities during the period is also provided. The overall opinion of periodic external quality assessments is disclosed.

In addition to core practices:

The central bank discloses the responsibilities of the audit committee as set out in its terms of reference/charter, approved by the Board (or relevant body), and as reviewed periodically. The key activities vis-à-vis the financial statements and internal/ external audits are described.

In addition to expanded practices:

A report of the audit committee is published, either separately or within the annual report.

The central bank discloses whether anti-Corruption legislation and measures (e.g., criminalizing Corruption offenses, laws to access information, and whistleblower protection) are applicable to decision-makers, staff, and agents of the central bank.

The central bank discloses its internal rules or Code of Conduct containing measures to prevent conflict of interest and Corruption, such as rules concerning ethics and values, and acceptance of gifts.

The central bank’s Legal Framework clearly notes that anti-Corruption legislation and measures apply to decision-makers, staff, and agents of the central bank.

The central bank discloses specific requirements on expected behavior of staff to prevent Corruption and conflict of interest. This could include requirements regarding key Objectives and expected behaviors, the application to all employees/Board members, and the coverage of relevant and important issues or risk areas. Sanctions for violations may be disclosed.

The central bank discloses whether a Code of Conduct has been adopted. If one exists, it is published on the central bank’s website.

In addition to core practices:

The central bank regularly discloses and publishes updated information on its rules applicable to its staff and agents:

• ethics rules and values
• the definition of Corruption offenses
• rules to prevent conflicts of interest
• rules on the acceptance of gifts and favors
• rules on abstention from decisions where a conflict of interests exists.
• guidance on external activities, outside income, and restrictions on central bankers’ pre- and post-public employment (“cooling off” periods).
• requirements on declaring assets of staff and other enforcement mechanisms designed to ensure compliance with conflict of interest rules.

The central bank discloses whether its organizational framework includes an internal function (e.g., Ethics Officer(s) or Advisors) responsible for ensuring the receipt of complaints and proper implementation of rules.

In addition to expanded practices:

The central bank publishes updated information on the applicability of other additional ethics and compliance resources, including any whistleblowing mechanisms, and rules for accessing confidential information held by the central bank.

The central bank discloses whether internal controls (such as measures to safeguard the Independence, ensure accountability and enhance the capacity of Ethics Officer(s) or Advisors) are established to ensure the proper implementation of the Code of Conduct.

The central bank discloses accessible information on:

• recruitment and staff turnover
• staff development
• leadership and succession
• diversity and inclusion.

Information may appear in the annual report in a separate report.

In addition to core practices:

The central bank discloses an accountability mechanism for human capital management. It includes reporting and review of the staffing related matters between middle/senior management and the body charged with oversight of these matters.

The central bank discloses whether its staff are recruited and promoted on non-political grounds, including references to relevant national laws that prohibit patronage and discrimination.

In addition to expanded practices:

The central bank discloses how the Human Capital Management function supports the central bank’s Mandate and strategy.

The central bank discloses policies on how it attracts, promotes, and retains staff.

In addition to core practices:

The central bank discloses information on how its communication processes are integrated into its core activities.

In addition to expanded practices:

The central bank discloses detailed information on communication arrangements, for example the publication of internal principles and guidelines for external communication.

In addition to core practices:

The central bank discloses clear and Easily accessible guidance on how and by which media it releases information. It actively promotes this information through announcements, statements, reports, media conferences, news releases, statistics, speeches, official information or secrecy acts, and research/technical notes.

In addition to expanded practices:

The central bank actively engages with the public and stakeholders on its communication policy and actively evaluates its communication policy through, for example, surveys. Efforts are described in the central bank’s annual report.

The central bank publishes a policy on confidentiality and secrecy. This policy includes reasons behind its policy decisions on confidentiality or secrecy, or which emerge from (compliance with) specific legislation.

The central bank also discloses the relevant laws, regulations, or voluntary policies or standards adopted by the central bank that expand or limit its confidentiality or secrecy (see also principle 1.1 on Legal Structure).

In addition to core practices:

The central bank publishes timely information on when its policy on confidentiality and secrecy is updated, the reasons for such an update, and the possible consequences for various stakeholders of the central bank.

In addition to expanded practices:

The central bank publishes information on whether it actively sought out input from stakeholders on its policy on confidentiality and secrecy (and updates thereof), and if so, in what form, and its reasons for doing so.

The central bank publishes (anonymous or aggregated) information on possible legal disputes surrounding its policy on confidentiality and secrecy.

Objectives and Framework

In addition to core practices:

The central bank discloses important aspects and dimensions regarding how the Monetary Policy Framework is implemented.

In addition to expanded practices:

The central bank has an articulated strategy for the practical implementation of its policy framework that is regularly communicated—including in the context of policy decisions.

In addition to core practices:

The central bank discloses an explanation of monetary policy decisions in the context of its monetary policy objective(s) and a comprehensive account of policy deliberations within a reasonable amount of time.

In addition to expanded practices:

The central bank discloses a detailed explanation of its monetary policy decisions in the context of its monetary policy objective(s) and framework and a comprehensive account of policy deliberations and voting behavior of decision-makers within a reasonable amount of time. The central bank provides regular venues (e.g., press conferences) for the media to ask questions and further clarify the rationale for the decisions.

In addition to core practices:

The central bank discloses its macroeconomic forecasts, including for key economic and financial variables regarded as most relevant for achieving its policy Objectives. The timing and extent of such disclosures are Publicly Available.

In addition to expanded practices:

The central bank discloses scenario analysis to help explain how its policy decisions foster attainment of its policy Objectives as well as highlight risks to the outlook. The central bank also discloses the relevant models used for forecasts and scenario analysis that inform its policy decisions.

The central bank is clear about its role in determining and implementing the policy⁸ on cross-border financial flows⁹ and foreign exchange administration. It discloses the objective(s), the legal and institutional frameworks it is acting under, its policy decisions, as well as the process by which policy decisions are taken.

Objectives and Framework

The Objectives and legal and institutional frameworks of the policy are clearly defined and disclosed.

The attributions, responsibilities, and Powers of the central bank with respect to the policy are clearly distinguished from those of the government/ other agencies in this area and are included in the relevant Legal Framework (e.g., central bank law or foreign exchange law) which is disclosed.

The central bank discloses information on:

• whether it can delegate some of its Functions in implementing the policy decisions to other entities
• the entities and the modalities of such delegation. The central bank also discloses the relevant Legal Framework.

In addition to expanded practices:

The strategy to achieve the policy Objectives is clearly defined and disclosed.

The central bank discloses: (i) the information on the decision-making process and its stages (e.g., elaboration of proposal, drafting of the decision, Public Consultation etc.); and (ii) the role and responsibilities of its Decision-making Bodies involved in the process and the frequency of their meetings.

Policy decisions (Regulatory Framework) are disclosed ensuring that there is sufficient lead time for those who are affected by the changes to adjust.

In addition to core practices:

Policy decisions are explained to the public through Q&As that are Easily accessible.

Draft policy decisions are disclosed in a timely manner.

The rationale of each (draft) policy decision in the context of the policy Objectives is disclosed in a timely manner.

The central bank invites comments on the draft policy decision from those affected by it and discloses the comments on its website.

In addition to expanded practices:

The central bank provides opportunity for public discussion on draft policy decisions.

The central bank discloses on its website the information related to the Public Consultation of a policy decision, including its feedback on the comments received during this process.

The central bank discloses in a timely manner the general considerations that underly a policy decision.

The expected outcomes of policy decisions, in the context of the policy Objectives, are disclosed.

In addition to core practices:

Detailed considerations (economic and other conditions and their analysis) that result in a policy decision, especially in case of introduction of a new measure or a change in the policy, are disclosed in a timely manner.

In addition to expanded practices:

With respect to a (draft) policy decision, the central bank discloses in a timely manner information about:

• each policy option it considered as an alternative to the option reflected in the (draft) policy decision
• considerations (supporting analysis) for alternative options
• the rationale for the choice of the option reflected in the (draft) policy decision.

The central bank periodically informs the public about the changes in the conditions that can result in a new measure or in a change in the policy (e.g., in the context of the capital account liberalization roadmap) and discloses such information.

In addition to core practices:

The central bank discloses its policy Objectives, and legal and institutional frameworks.

In addition to expanded practices:

The central bank discloses general rules of Foreign Exchange Management policy instruments, is clear on intended Objectives, key assumptions, and framework of reaching decision to intervene.

In addition to core practices:

The central bank explains the key Objectives, policy framework, rationale of its policy decision, and how these interact with monetary policy Objectives.

In addition to expanded practices:

The central bank discloses the rationale and operational rules of foreign exchange intervention policy, as well as the instruments it uses and how these interact with monetary policy. The central bank discloses ex-post minutes of relevant committee meetings (e.g., Monetary Policy Committee) with a defined lag.

In addition to core practices:

The central bank discloses the analysis backing its policy decision and any changes to operational mechanisms and transmission of foreign exchange intervention policy.

In addition to expanded practices:

The central bank discloses the analysis backing its policy decisions, any changes to operational mechanism, and conducts ex-post evaluation of the impact of foreign exchange intervention policy at a defined frequency.

Objectives and Framework

In addition to core practices:

The central bank discloses key Objectives, governance, Risk Exposure (credit and market), and investment constraints. It discloses how policy decisions interact with key Objectives and other policies.

In addition to expanded practices:

The central bank publishes the objective of each policy decision, governance, Risk Exposure (credit and market), and investment benchmarks. It details how each of these interact with other policies. It is clear how the adequacy and liquidity of reserves are determined.

In addition to core practices:

The central bank discloses its decision-making process, key assumptions, methods of reaching its investment and risk decisions, and how it allocates oversight responsibility.

In addition to expanded practices:

The central bank discloses its decision-making hierarchy and oversight responsibility, key considerations for reaching decisions, and ex-post disclosure of investment committee deliberations with a defined lag.

In addition to core practices:

The central bank publishes analysis backing its strategic decision on investment and risk policy, and any changes to operational mechanisms.

In addition to expanded practices:

The central bank publishes analysis backing its policy decisions, any changes to operational mechanisms, and ex-post evaluations of impact of investment and risk assessment at a defined frequency.

Objectives and Framework

In addition to core practices:

The central bank publishes important facets of its macroprudential policy strategy, linking its macroprudential policy tools to its macroprudential policy Objectives. This could include intermediate Objectives pursued with particular policy tools, the information used to arrive at policy decisions (such as early warning indicators and stress test results), and the way it intends to take account of potential side effects and costs of macroprudential instruments.

In addition to expanded practices:

The central bank has a comprehensive, articulated strategy for the practical implementation of its policy framework. The strategy is regularly communicated and disclosed, including in the context of policy decisions.

Introduction of or adjustments to macroprudential tools are publicly announced in a timely manner with due consideration given to frontloading issues (in the case of flow-based macroprudential tools). The information on the

composition and structure of the macroprudential policy decision-making body of the central bank and its upcoming meeting schedule are disclosed.

In addition to core practices:

The central bank provides a detailed explanation of the rationale and benefits of macroprudential policy decisions in the context of macroprudential policy Objectives. It provides a comprehensive account of policy deliberations within a reasonable amount of time.

In addition to expanded practices:

The central bank discloses its assessment of potential vulnerabilities and provides justification in the event it did not take mitigating policy actions. It provides a comprehensive account of policy within a reasonable amount of time, disclosing how decisions (e.g., voting records) about the level of its macroprudential policy tools are taken.

In addition to core practices:

The central bank periodically publishes indicators (such as early warning indicators or stress test results) and explains how they relate to the need for macroprudential policy action.

In addition to core practices:

The central bank discloses the different forms/operations in which liquidity support may be provided, thereby distinguishing between bilateral and market-wide liquidity support. This should provide clarity on institutional eligibility for such support, the central bank’s decision-making process, whether other agencies are involved, and its disclosure policy.

In addition to expanded practices:

The central bank discloses the general rules, parameters, and conditions for each form of liquidity support. General rules and applicable parameters should include (i) institutional eligibility (including the set of entities or markets that are generally eligible for liquidity support); (ii) conditionality (including the ability of the central bank or supervisory authority to collect, monitor, and assess information on whether the use of the liquidity provided is consistent with the Objectives of the liquidity support); (iii) supervisory intrusion (including the central bank’s or supervisor’s legal power to conduct enhanced supervisory oversight and the ability to adopt early intervention measures); and (iv) financial parameters (including the applied interest rate, eligible collateral, maturity, and currency in which liquidity support is provided).

In addition to core practices:

The central bank discloses whether revisions of supervisory policies and guidance are in consultation with the private sector.

In addition to expanded practices:

The central bank discloses how it ensures consideration of the private sector’s feedback on the implementation of the policies and guidance.

In addition to core practices:

The AML/CFT internal control policies are audited by an independent party, preferably an independent and reputable third party, and the results are presented to the Board, confirmation that the results were presented to the Board is published.

In addition to expanded practices:

The central bank discloses how it ensures the timely remediation of any identified weaknesses, confirmation that all results have been addressed is published.

In addition to core practices:

The operational target is clearly defined and disclosed to the public.

The operational target and the link between the operational framework and monetary policy Objectives is disclosed.

The role of reserve requirements is disclosed.

The central bank discloses the terms and conditions of monetary operations and reserve requirements.

The eligible collateral is defined and published.

The general characteristics of each instrument is published.

The reserve requirements’ ratio, remuneration, and averaging provision (if any) are published.

In addition to core practices:

The central bank discloses terms and conditions that explain how the level of reserve requirements is determined.

In addition to expanded practices:

The central bank discloses detailed regulations on monetary operations and reserve requirements. These are published on the central bank website and regularly updated.

The regulations explain how open market operations are calibrated.

The detailed characteristics (maturity, interest rate, auctioning method, collateral and haircuts, etc.) of each instrument are published and regularly updated.

The role of the reserve requirements and details on the framework and parameters of reserve requirements are disclosed.

The use of forward guidance (if any) is disclosed.

In addition to core practices:

The central bank discloses the eligibility criteria of monetary policy counterparties, as well as the terms and conditions for participating.

In addition to expanded practices:

The list of eligible institutions, counterparties of monetary operations, and their respective access rights is published and regularly updated.

The set of instruments (as a minimum, the Regulatory Framework, licenses/approvals, reports, monitoring and Enforcement instruments, and foreign exchange transactions conducted by the central bank)¹¹ that the central bank can use to implement the policy are clearly defined and disclosed. The Regulatory Framework as well as explanations on types and hierarchy of regulatory instruments are disclosed.

The following information about the instruments is also disclosed:

• types of licenses/approvals that the central bank can grant
• types of reports to be submitted to the central bank
• types of monitoring and Enforcement instruments (including sanctions) the central bank can use
• types of foreign exchange operations the central bank can perform with entities/individuals, including applicable fees.

The circumstances in which the instruments can be used are clearly defined and disclosed.

In addition to core practices:

The central bank provides and discloses a brief description of each regulatory instrument (e.g., the objective and scope of an act).

The central bank discloses in a timely manner the most recent consolidated version of each regulatory instrument that incorporates all changes.

The Regulatory Framework clearly defines, and the central bank discloses the following:

• the types of activities, persons, and transactions the central bank is entitled to regulate/license/approve/perform/monitor/sanction
• the rules and conditions for carrying out regulated transactions (including prohibited transactions, if any) and activities
• licensing/approval requirements
• the considerations underlying the decisions on granting the License/approval (or denial of it) for the various activities/persons/transactions
• the procedure for granting licenses/approvals, including the time limit within which a decision must be made and communicated to the affected person and the role and responsibilities of its Decision-making Bodies involved in the process
• the reporting requirements that entities (including banks) and individuals must comply with and the types of persons/transactions that are subject to such requirements
• the forms in which required reports are collected and the relevant compilation guidelines
• the types of entities/individuals/transactions that are subject to monitoring by the central bank and the relevant Monitoring Instruments
• types, scope, and extent of sanctions that can be imposed for noncompliance
• the types of entities/individuals having access to foreign exchange operations of the central bank and the operations accessible to them.

Decisions in individual cases, including the considerations underlying the rejection of a request for License/approval (if any) are communicated to the affected persons in a timely manner.

In addition to core practices:

The central bank discloses:

• detailed description of licensing/approval requirements, and documents to be submitted with the request for a License/approval
• the conditions for granting a License/approval automatically (if any)
• the procedure for imposing sanctions for noncompliance with the Regulatory Framework and Decisions in individual cases.

In addition to expanded practices:

Aspects related to the granting of licenses/approvals and use of/access to other policy instruments are explained to the public through Q&As that are Easily accessible.

In addition to core practices:

The central discloses the choice of instruments, the modalities, and provides rationale for their use to achieve its policy Objectives. It clearly defines eligibility criteria of its Foreign Exchange Management counterparties and publishes a regulation governing their conduct, sanction rules, and mode of access.

In addition to expanded practices:

The central bank discloses the choice of instruments, the modalities, and provides rationale of each instrument to attain the central bank’s broader Foreign Exchange Management policy Objectives. The eligibility criteria of the Foreign Exchange Management counterparties are clearly stated in a regulation and published on the central bank website.

In addition to core practices:

The central bank discloses the rules governing modes of operations, and markets (e.g., spot and derivatives) that are defined in regulations.

The eligibility criteria of its Foreign Exchange Management counterparties are clearly stated in a regulation.

In addition to expanded practices:

The coverage of Foreign Exchange Management operations is clearly defined, including rules, modes, and markets that are updated regularly and are available on the central bank’s website.

The eligibility criteria of its counterparties, including a regulation governing their conduct, sanction rules, and mode of access, is published on the central bank’s website.

The central bank discloses composition of eligible reserve assets and instruments, and risk disclosures by asset class.

In addition to expanded practices:

The central bank discloses composition of reserve assets, instruments, and disclosures on risks exposure (by group and instruments) at a defined frequency and time lag.

In addition to core practices:

The central bank discloses rules and procedures for selection of markets in which it operates, counterparties, custodians, and service providers.

In addition to expanded practices:

The central bank discloses aggregated exposures at a defined frequency and time lag.

In addition to core practices:

The annual report contains a general assessment of reserve adequacy, liquidity, and limited Risk Exposure specific to reserve management operations.

In addition to expanded practices:

The central bank conducts annual liquidity stress tests. It publishes a reserve adequacy assessment and a Risk Statement outlining the financial, operational, and other risks arising from its operations with a defined time lag.

In addition to core practices:

The central bank regularly publishes a comprehensive assessment of the main risks to financial stability, including new and emerging vulnerabilities.

In addition to core practices:

The central bank discloses the main information on the design of the macroeconomic stress scenario and the risks covered, along with underlying assumptions.

In addition to expanded practices:

The central bank discloses information on: (i) the type of exercise (bottom-up, top-down, or a combination of both); (ii) the design of the macroeconomic stress scenario, including details on its estimation, plausibility, and time horizon; (iii) the risks covered and detail information on the models used; (iv) evolution of financial statements over the stress test horizon; (v) the full set of assumptions; and (vi) the Regulatory Framework considered.

In addition to core practices:

The central bank discloses the type of institutions covered in the stress testing (banks, pension funds, insurance companies, or others) and the number of institutions.

In addition to expanded practices:

The central bank discloses the type of institutions covered in the stress testing (banks, pension funds, insurance companies, or others) as well as the names of the institutions participating in the stress test.

In addition to core practices:

In addition to official documents, the central bank discloses clear and accessible statements that disclose the key design features of its tools and how they may affect various market participants. Documents may have an educational purpose).

In addition to expanded practices:

The central bank consults the public before enacting major changes to the design of macroprudential tools.

In addition to core practices:

The central bank discloses the forms of market-wide liquidity support and one of two additional channels of information:

1. The delineation of liquidity support operations from standard operations, with information regarding maturity, amounts of liquidity support, and financial parameters

or

2. How the liquidity support measure is intended to contribute to restoring/maintaining financial stability or market functioning.

In addition to expanded practices:

The central bank discloses the forms of market-wide liquidity support and both additional channels outlined in expanded practices.

For bilateral liquidity support, information about the provision of support is disclosed only after the financial stability risk has passed, and no longer violates confidentiality requirements agreed on prior to entering the support agreement with the requesting institution.

Disclosure should also not diminish the central bank’s discretion/freedom to decide on a case-by-case basis if liquidity support is provided, and in which form and under which conditions liquidity support is provided.

In addition to core practices:

The central bank discloses statistical information on the completion rates of its off-site and on-site AML/CFT supervisory activities.

In addition to expanded practices:

The central bank maintains and discloses up-to-date information on the names of the financial institutions it supervises for AML/CFT purposes, including up-to-date information regarding cross-border activities.

In addition to core practices:

The central bank periodically communicates to the public and to designated public authority actions taken in order to achieve the policy Objectives or, in the case of Objectives not achieved, provides reasons and explanations thereof.

In addition to expanded practices:

The central bank is transparent about its interactions with designated public authority on monetary policy.

In addition to core practices:

The central bank publishes evaluations of efforts to meet targets and information about economic developments that could affect the prospects of achieving monetary policy objective(s).

In addition to expanded practices:

Methods, techniques, and data underlying dedicated monetary policy evaluations are publicly accessible.

The level of the operational target is published.

The outstanding volumes and interest rates of each instrument are published.

Aggregated bank balances at the central bank (bank reserves) are published.

The level of the operational target is disclosed daily to the public.

The outstanding volumes and interest rates of each instrument are published.

The aggregated bank balances at the central bank (bank reserves) are published.

The level of the operational target is disclosed daily on the central bank’s website.

The outstanding volumes per instrument are published frequently and in a timely manner on the central bank’s website.

Auction results are published in a timely manner on the central bank’s website.

The aggregated bank balances at the central bank (bank reserves) and realized autonomous liquidity factors are published frequently in a timely manner on the central bank’s website.

A designated public authority to which the central bank is accountable on the policy is disclosed, along with the frequency and the manner in which the central bank is required to report to this authority.

The central bank discloses information on its governing bodies with respect to policy implementation, as well as their responsibilities to report on the implementation of the policy and the central bank’s performance in achieving the policy objective(s).

The central bank discloses:

• whether it delegated some of its Functions in implementing the policy decisions to other entities
• the list of such entities/types of entities and their responsibilities
• whether such entities are required to report separately on the outcome of the implementation, or the central bank’s report includes this information.

In addition to core practices:

The central bank discloses information about interaction of the given policy with other policies (such as monetary, macroprudential, and fiscal policy).

The central bank discloses:

• whether the policy Objectives have been achieved
• general information on the actions taken to achieve the policy Objectives and their results
• developments that influenced the implementation of the policy/decisions and the desired results.

In addition to core practices:

The central bank discloses:

• detailed information on the actions taken to achieve the policy Objectives and their results
• the reasons for not achieving the policy Objectives (if this is the case).

In addition to expanded practices:

Policy actions and the results in achieving the policy Objectives are explained to the public through Q&As that are Easily accessible.

The central bank discloses a description of the foreign exchange regime, including existing restrictions related to cross-border transactions and foreign exchange operations within the country and their impact on the economy.

The central bank discloses on a regular basis information about:

• the Regulatory Framework and any changes to it
• the types and number of granted licenses/approvals
• the types and number of inspections conducted
• the types and number of sanctions imposed for noncompliance
• the types of foreign exchange operations performed by the central bank with entities and individuals
• the types and volume of cross border financial flows and foreign exchange transactions within the country.

The central bank publishes lists of

entities/individuals licensed to perform various foreign exchange activities in the given area (e.g., a list of licensed foreign exchange bureaus) and updates them regularly.

In addition to core practices:

The central bank discloses on a regular basis detailed information about:

• the Regulatory Framework and any changes to it
• the entities/individuals licensed to perform activities subject to licensing (e.g., name, address, contact details, type of the licensed activity)
• approvals granted
• inspections conducted and their results
• sanctions imposed for noncompliance
• cross border financial flows and foreign exchange transactions within the country (data on an aggregate basis).

The central bank discloses on a regular basis the results of its operations with entities and individuals (on an aggregate basis).

In addition to expanded practices:

The central bank discloses the taxonomy of its Foreign Exchange Management framework, responsibilities of its governing bodies with respect to Foreign Exchange Management, and evaluations of the policy actions taken.

In addition to core practices:

The central bank publishes its policy decisions, their outcomes, and any changes to operational mechanisms of its Foreign Exchange Management policy in its annual report.

In addition to expanded practices:

The central bank discloses the mode used for Foreign Exchange Management, instruments used, and data underlying policy evaluations of foreign exchange interventions. Information is disclosed in the central bank’s monetary policy report at a defined frequency.

In addition to core practices:

The central bank publishes aggregated data on its interventions (purchases and sales) in its monthly bulletin with a predefined time lag and frequency.

In addition to expanded practices:

The central bank reports on its interventions on its website. The aggregate volume of interventions, and whether specific instruments were bought or sold, is reported on a monthly basis. There is a predefined lag of not more than a month (consistent with an official release of report on the international reserves, as per the Special Data Dissemination Standard prescription).

In addition to core practices:

The central bank discloses the institutional obligations, Objectives, and responsibilities of its Decision-making Bodies for reserve management.

In addition to expanded practices:

The central bank discloses its framework, the responsibilities of its governing bodies with respect to reserve management, and its evaluations of policy actions taken.

In addition to core practices:

The central bank publishes information about the level foreign exchange reserve assets, liabilities, short-term drains, and commitments by the monetary authorities, according to a predefined schedule.

In addition to expanded practices:

The central bank publishes outcomes as per reserve data template and the Special Data Dissemination Standard. The data categories include: the official reserves and other foreign currency assets, predetermined short-term drains on reserve assets, and contingent short-term net drains on reserve assets, according to a pre-defined schedule.

In addition to core practices:

Please refer to practices under Pillar I Tools—Independently Audited Financial Statements and Risk Exposure.

In addition to expanded practices:

Please refer to practices under Pillar I Tools—Independently Audited Financial Statements and Risk Exposure.

In addition to core practices:

Key interactions between the central bank and designated public authorities on issues of financial stability are disclosed.

In addition to core practices:

The central bank publishes dedicated policy evaluations around its specific macroprudential tools (stress tests, event studies).

In addition to expanded practices:

Methods, techniques, and (to the extent possible) data underlying dedicated policy evaluations are made public.

In addition to core practices:

The framework provides information about how and to what extent the liquidity support measure contributed to restoring/maintaining financial stability or market functioning.

It also provides information on the central bank’s risk taking in connection with the support.

In addition to expanded practices:

The framework discloses how the liquidity support measures impact other parts of the financial system and the economy more broadly. The central bank discloses information on interaction with financial market functioning, microprudential supervision, macroprudential regulation and supervision, and whether assistance has cross-border effects.

In addition to core practices:

When sanctions are imposed for breaches of AML/CFT requirements, information is published on the name of the financial institution, the enforcement actions imposed, and a brief

description of the breaches identified, while allowing case-by-case exceptions particularly where publication jeopardizes the stability of financial markets or an on-going investigation.

In addition to expanded practices:

The central bank publishes information regarding the implementation of remedial actions as a result of the supervisory action.

In addition to core practices:

The annual report on AML/CFT controls includes statistical information on the number of suspicious transaction reports submitted to the financial intelligence unit.

In addition to expanded practices:

The annual report publishes the findings of an independent audit, preferably an independent and reputable third party, of the effectiveness of internal AML/CFT controls.

Government

Selected principles from BCP, ICP, IOSCO, KA, and PFMI

(see Annex)

The central bank discloses its relationship with the government.¹² This includes the Exchange of information, the coordination of policies, and financial aspects such as rules on profit distribution, clearly distinguishing the different roles and modalities this can take.

In addition to core practices:

The central bank clearly defines and discloses procedures for the approval and reporting/accountability on the exercise of the central bank’s Functions with respect to the government, as well as the main terms and conditions governing those Functions.

In addition to expanded practices:

The central bank discloses the detailed terms and conditions of the central bank’s Functions and policies with respect to the government, as contained in a regulation or agreement.

Domestic Financial Agencies

Selected principles from BCP, ICP, IOSCO, KA, and PFMI (see Annex)

In addition to core practices:

The central bank discloses the detailed terms and conditions of cooperation between the central bank and domestic financial agencies.

The central bank discloses the agreements with domestic financial agencies.

The central bank discloses the instruments used in the interaction between the central bank and domestic financial agencies.

The central bank discloses regular reports on the interaction between the central bank and domestic financial agencies.

With respect to macroprudential policy and financial stability:

Insofar as the central bank is part of an interagency committee, it discloses the provisions governing such a committee in regard to its composition, the respective members’ roles, the nature of the cooperation, and the mechanism of the cooperation.

Foreign Agencies

Selected principles from BCP, ICP, IOSCO, KA, and PFMI (see Annex)

The central bank clearly defines and discloses the relationship for Exchange of information and coordination of actions/policies between the central bank and international organizations, foreign governments, other central banks, and other relevant foreign agencies.

The central bank discloses its policies, terms, and conditions governing interaction with these bodies.

The central bank clearly defines and discloses instruments used in the interaction (including financial transactions) between the central bank and these bodies.

The central bank discloses on a regular basis the outcome of its relationship with these bodies.

The Legal Framework contains clear provisions describing cooperation between the central bank and foreign agencies, and the basic terms and conditions of such interaction.

The central bank discloses policies, cooperation, (co-) decision-making modalities, and arrangements for the (in)formal sharing of information with foreign agencies.

The central bank discloses the instruments used in the interaction and financial transactions between the central bank and foreign agencies.

The central bank discloses regular reports on the interaction between the central bank and foreign agencies.

In addition to core practices:

The Legal Framework contains detailed terms and conditions of cooperation between the central bank and foreign agencies.

The central bank discloses agreements with foreign agencies.

The central bank discloses information on international or bilateral relations and (mandatory) obligations arising from such relations.