IMF Executive Board Approves New Central Bank Transparency Code

July 30, 2020

Washington DC: On July 2nd, the Executive Board of the International Monetary Fund (IMF) approved the new IMF Central Bank Transparency Code (CBT). The development of the CBT follows on the Board’s direction in April 2019 to update the 1999 Monetary and Financial Policies Transparency Code, and bring it in line with the recommendations of the 2017 Joint Review of the Standards and Codes Initiative, indicating the need for risk-based assessments to support policy effectiveness and address macroeconomic risks.


The accompanying paper outlines the CBT’s 5-pillar framework and the proposed application of the CBT. It also notes that the CBT, its principles and the detailed practices, were developed after extensive consultation with relevant stakeholders. The preparation of the CBT benefited from guidance from a High-Level Advisory Panel, consisting of eminent former central bank governors and academics, and input from an extensive consultation process with central banks and other relevant international organizations. These engagements will help ensure that the CBT can provide strong, clear, and detailed guidance to central banks regarding their own transparency. The paper also notes the importance of the CBT for policy effectiveness and accountability in light of the wide-ranging policy measures undertaken by central bank in recent years in response to extraordinary shocks, including from the COVID-19 pandemic.


The CBT will be applicable, on a voluntary basis, to all IMF members, including less-developed economies. The modular, risk-based, and proportional set-up is well-suited to taking into account country-specific circumstances. This will also enable the CBT to serve as a tailored diagnostic tool in IMF capacity development and facilitate the voluntary use of the CBT in Financial Sector Assessment Programs and IMF surveillance, such as Article IV consultations, and in an IMF‑supported program context.


Executive Board Assessment


Directors welcomed the opportunity to consider the staff proposal for the Central Bank Transparency Code (CBT) and broadly endorsed its general principles. They noted that the role of central banks–in terms of expanded mandates, unconventional policy actions and complex operations–has evolved considerably in response to the 2008 financial crisis and the COVID‑19 pandemic, and agreed that these changes have heightened the need for enhanced transparency.

Directors appreciated the extensive outreach by staff in the preparation of the CBT and thanked the members of the Advisory Panel for their thoughtful guidance and contributions. They noted that the CBT is a timely and useful tool for central banks to guide their transparency practices and strengthen accountability, ensuring more effective policy outcomes and better‑informed dialogue with stakeholders.

Directors welcomed the voluntary nature of the CBT and its relevance for all member countries, including less‑developed economies, recognizing that central banks operate in diverse environments, as highlighted in the descriptions of the range of practices for the CBT principles. They appreciated that these practices are not intended to be a tool for ranking the transparency choices of central banks and welcomed the revised practice labels.

Directors welcomed the CBT’s acknowledgement of the trade‑offs between transparency and the legitimate need for confidentiality, as well as the role of country‑specific circumstances, including the legal and institutional frameworks, in defining these trade‑offs. They appreciated that the CBT recognizes these needs in the context of market sensitive issues, financial stability considerations, and personal data, but some saw scope for a broader definition of qualified confidentiality reasons. In the context of currency unions, a number of Directors were concerned that publishing voting behavior may have important trade‑offs and noted the CBT should avoid being overly prescriptive. Directors broadly endorsed the CBT principles and description of practices related to foreign exchange management, with some Directors calling for caution regarding information disclosure in this area to avoid limiting central bank flexibility and prevent speculative transactions.

Directors supported staff carrying out CBT pilot reviews on a voluntary basis and in close cooperation with the relevant authorities, while ensuring a proper representation of Fund membership, which could then be discussed by the Board. Given the competing demands on authorities and on Fund resources considering the ongoing COVID‑19 crisis, a number of Directors were of the view that the two‑year timeline might need to be reconsidered.

Directors supported the notion that the CBT could serve as a useful diagnostic tool in capacity development and most thought it could be helpful for Fund surveillance, on a voluntary basis.


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