Practices

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Practices

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Purpose and scope

• The Code of Good Practices on Transparency in Monetary and Financial Policies (CBT) is an international code that allows central banks and their stakeholders to map transparency practices of the central bank to international best practices.
• Purpose: to enhance transparency and accountability of the central bank and contribute to policy effectiveness.
• Note: The CBT is not intended as a governance code.

Structure and methodology

• Practices are presented by Principle and by DIMENSION with classifications: CORE, EXPANDED, and COMPREHENSIVE.
• A general principle (No. 0): "General Principle on Central Bank Transparency: To strengthen their accountability, and as a prerequisite for their Autonomy, whilst taking legitimate needs for confidentiality into account, central banks disclose their governance, policies, operations, and outcome of those policies and operations, as well as the official relations they maintain with government, domestic and international agencies, and other institutions."
• Numbering and organization: Principles and sub-dimensions are numbered (e.g., 1, 1.1., 1.3.1., 2.1.2., 3.5.3., 4.4.2., 5.1.2., etc.).

PILLAR I—GOVERNANCE (key dimensions and practice statements)

• 1.1. Legal Structure
  • Core: "The central bank discloses its Legal Framework to the public in a manner that is clear and Easily accessible."
  • Expanded: disclosure of a broad description of Legal Framework, Legal nature, and Legal protection; an updated and consolidated central bank law; description of Objectives, Functions, and Powers.
  • Comprehensive: disclosure of specific and detailed information describing Legal Framework, Legal nature, and Legal protection; advance communication of planned reviews and stakeholder engagement.
• 1.2. Mandate
  • Core/Expanded/Comprehensive: "The central bank discloses its Mandate—including its Objectives, Functions, and legally defined Powers—in a manner that is clear and Easily accessible to the public."
  • Additional elements: mission statement disclosure; legal foundation of Objectives, Functions, and Powers; disclosure of quantified Objectives where applicable.
• 1.3. Autonomy (sub-dimensions)
  • 1.3.1 Institutional/Operational: disclose prohibitions on seeking/taking instructions and extent of Autonomy; clarify goal or instrument Autonomy.
  • 1.3.2 Functional: "There is clarity on whether the central bank is able to perform its duties without prior approval from the government."
  • 1.3.3 Personal: disclose Security of Tenure, term durations, appointment/dismissal criteria, remuneration regulations, liability rules.
  • 1.3.4 Financial: disclose financial resources (capital, budget, reserves, provisions, profit distribution mechanism, monetary financing, accounting standards); disclose regulations and procedures for budget determination, provisions, accounting treatment, dividends, recapitalization.
• 1.4. Decision-making Arrangement
  • Core: "The central bank discloses a clear overview of the organizational structure or allocation of responsibilities to its Decision-making Bodies: policy making, day-to-day management, and internal oversight of the central bank."
  • Expanded/Comprehensive: disclose Functions of Decision-making Bodies, composition, voting arrangements, meeting frequency, CVs/biographies of members.
• 1.5. Risk Management
  • Core: disclose principal risks (financial, operational, legal) and framework to manage them, including Risk Governance Structure and Risk Strategy.
  • Expanded/Comprehensive: annual report risk disclosures, Risk Statement, mapping of risks to Mandate, quantified demands on financial resources and buffers, methodologies for quantification.
• 1.6. Accountability Framework (sub-dimensions)
  • 1.6.1 Arrangements: disclose internal/external audit arrangements, audit committee reporting, publication of audited financial statements and annual reports; Legal Framework provisions for external audit and publication deadlines.
  • 1.6.2 Tools: publish audited financial statements in robust accounting framework with external audit opinion; disclose internal audit framework and scope; publish audit committee composition and meetings.
  • 1.6.3 Anti-Corruption Measures and Internal Code of Conduct: disclose applicability of domestic anti-Corruption legislation and internal Code of Conduct; publish ethics rules, conflict-of-interest rules, gift acceptance, asset declaration, whistleblowing mechanisms.
  • 1.6.4 Human Capital Management: disclose recruitment, staff turnover, development, leadership and succession, diversity and inclusion, salary scale if available, and accountability mechanisms for human capital management.
• 1.7. Communication
  • 1.7.1 Arrangement: disclose communications organizational structure, responsibilities, and senior executives responsible for communications.
  • 1.7.2 Strategy/Tools: disclose Objectives, target audiences, channels, and tools of communication policy; guidance on how and by which media it releases information.
• 1.8. Confidentiality
  • Core: "The central bank discloses its policy on confidentiality or secrecy regarding information managed, gathered, or obtained by other means (either partially or entirely) under its control," including reasons for disclosure/non-disclosure and relevant laws or voluntary policies.

PILLAR II—POLICIES (key dimensions and practice statements)

• 2.1. Monetary Policy
  • Core: "The central bank publicly and clearly discloses the Objectives, policy framework, and instruments of monetary policy."
  • 2.1.1 Objectives and Framework: disclose Monetary Policy Framework and strategy; conceptual framework underpinning policy.
  • 2.1.2 Policy Decisions: disclose decisions timely, indicate how decisions foster achievement of objectives; disclose meeting calendar and voting procedures.
  • 2.1.3 Supporting Analysis: disclose relevant economic data and analysis; disclose macroeconomic forecasts and models under expanded/comprehensive practices.
• 2.2. Cross-Border Financial Flows and Foreign Exchange Administration
  • Core: central bank discloses role, Objectives, legal and institutional frameworks, policy decisions, and process by which decisions are taken; disclose delegation modalities where applicable.
  • 2.2.2 Policy Decisions: disclose decision-making stages, public consultation, and lead time for affected parties.
  • 2.2.3 Supporting Analysis: disclose intended outcomes and supporting analysis; disclose alternative policy options and rationale under expanded practices.
• 2.3. Foreign Exchange Management
  • Core: disclose foreign exchange policy Objectives, hierarchy of Objectives, operational framework, and instruments of interventions.
  • 2.3.2 Policy Decisions and 2.3.3 Supporting Analysis: disclose decision-making process, rationale, transmission channels, and ex-post evaluations.
• 2.4. Foreign Exchange Reserve Management
  • Core: disclose policy Objectives, broad investment Objectives, risk exposure, governance, and oversight allocation.
  • 2.4.2 Policy Decisions and 2.4.3 Supporting Analysis: disclose decision-making structure, investment/risk decisions, and analysis backing strategic investment choices; ex-post evaluations under expanded practices.
• 2.5. Macroprudential Policy
  • Core: disclose Objectives, decision-making process, instruments, indicators and supporting analysis (e.g., Financial Stability Report), and periodic publications of indicators and stress-test results.
• 2.7. Emergency Liquidity Assistance (ELA)
  • Core: disclose scope and Objectives of ELA while maintaining necessary confidentiality; disclose forms/operations and eligibility, decision-making process, and disclosure policy that does not impede financial stability or central bank discretion.
  • Expanded/Comprehensive: disclose rules, parameters, conditionality, supervisory intrusion, financial parameters, and ex-post disclosure once confidentiality is no longer required.

PILLAR III—OPERATIONS (key dimensions and practice statements)

• 3.1. Monetary Policy Operations
  • Core: disclose operational framework with operational target, Objectives, instruments, collateral, and access criteria.
  • 3.1.1 Instruments: publish set of Monetary Policy Instruments.
  • 3.1.2 Coverage: disclose terms/conditions of operations, eligible collateral, reserve requirements ratio, remuneration, and averaging provisions.
  • 3.1.3 Access: disclose categories of counterparties and eligibility criteria.
• 3.2.–3.4. Cross-Border, Foreign Exchange Management, and Reserve Management operations
  • Disclose instruments, coverage, eligibility criteria, markets, counterparties, selection criteria for assets and service providers, and assessments of adequacy and liquidity at defined periods.
• 3.5. Financial Stability Assessments and Stress Testing
  • 3.5.1 Financial Stability Assessments: periodic public assessment of risks to financial stability, including new and emerging vulnerabilities.
  • 3.5.2 Macroprudential Stress Testing Methods: disclose methods and key assumptions; publish aggregated results.
  • 3.5.3 Stress Testing Coverage: disclose types and numbers of institutions covered; names of institutions disclosed under expanded practices.
  • 3.5.4 Central Bank Use of Stress Test Results: disclose how aggregate and individual results may affect policy decisions.
• 3.6. Macroprudential Policy Implementation
  • 3.6.1 Design: disclose precise design and Objectives of macroprudential instruments and scope of application.
  • 3.6.2 Enforcement: disclose enforcement mechanisms, responsible agencies, incentives, and penalties.
• 3.8. Emergency Liquidity Assistance (operations)
  • Disclose market-wide liquidity support forms and, when confidentiality no longer required, disclosure on bilateral support conditions and parameters.

PILLAR IV—OUTCOME (disclosure of outcomes and accountability)

• 4.1. Monetary Policy Outcomes
  • 4.1.1 Governance Actions: disclose to whom accountability is owed and how it is discharged; report on conduct of monetary policy and performance in achieving objectives.
  • 4.1.2 Policies: disclose progress and prospects toward achieving monetary policy objectives; publish evaluations and supporting data under expanded practices.
  • 4.1.3 Operations: publish levels of operational target, volumes and interest rates of instruments, aggregated bank reserves; daily disclosure under expanded/comprehensive practices.
• 4.2.–4.5. Outcomes for Cross-Border Policy, Foreign Exchange Management, Reserve Management, and Macroprudential Policy
  • Disclose governance accountability, whether Objectives have been achieved, detailed policy actions and results, regulatory framework changes, licensing/approval statistics, market operations results, reserve levels and composition according to predefined schedules, and ex-post evaluations of macroprudential actions.
• 4.7. Emergency Liquidity Assistance Outcomes
  • Framework allows disclosure of provision of liquidity support, terms, conditions, and amounts while maintaining confidentiality as required; market-wide amounts/conditions disclosed; bilateral support disclosed after confidentiality lapse.

PILLAR V—OFFICIAL RELATIONS (relationships, information exchange, and disclosures)

• 5.1. Government
  • Disclose relationship with the government including exchange of information, policy coordination, profit distribution rules; disclose institutional relationships, procedures for approval and reporting, and terms/conditions of financial transactions with government (fiscal agent role, advances, guarantees, loans, agency services).
• 5.2. Domestic Financial Agencies
  • Disclose cooperation, information-sharing arrangements, decision-making modalities, agreements with domestic financial regulatory and supervisory authorities, and arrangements to restore or maintain financial stability.
• 5.3. Foreign Agencies
  • Disclose dealings with international organizations, foreign governments, other central banks, including nature of interactions, obligations, instruments used, and regular reports on interactions.
• 5.4. Other Relations
  • Disclose involvement with private or semi-public institutions, and investments in and ownership of subsidiaries and joint ventures.

Content in this bundle

• Central Bank Transparency Code—Self-Review
  • Central Bank Transparency Code—Self-Review (Markdown version)
  • Central Bank Transparency Code—Self-Review (DOCX)