IMF Executive Board Discusses the Outcomes of Central Bank Transparency Code Pilot Reviews
IMF News, March 15, 2023
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- Published: March 15, 2023
Overview
- On February 15, 2023, the Executive Board of the International Monetary Fund (IMF) discussed a policy paper titled "The Central Bank Transparency Code- Findings of the Pilot Reviews."
- The Central Bank Transparency Code (CBT) was adopted by the Board in 2020 and is described as a comprehensive set of transparency principles and practices applicable to all central banks regardless of mandates, governance frameworks, and institutional arrangements.
- Staff conducted seven pilot reviews on a diverse set of central banks reflecting different levels of income, exchange rate regime, and geographies.
Pilot reviews — key findings and impacts
- The pilot reviews documented transparency practices across all key aspects of central banking and highlighted areas for improvement.
- The CBT reviews’ recommendations received strong traction from the participating central banks.
- A survey of the participating central banks, conducted following each CBT review, confirmed that all CBT pilots were viewed as very beneficial, confirming staff’s view of the efficacy and success of the CBT.
- The pilot CBT reviews helped to facilitate work in other IMF workstreams, notably:
- the Financial Sector Assessment Program (FSAP)
- Article IV consultations
- Technical Assistance
- The pilot reviews demonstrated that CBT reviews can be an effective tool in support of central bank independence by enhancing overall transparency and accountability.
Executive Board assessment and guidance
- Executive Directors welcomed the update on CBT implementation and appreciated the strong traction and positive feedback from participating central banks.
- Directors emphasized that the CBT should:
- retain its voluntary nature
- strike the right balance between transparency and confidentiality in a manner commensurate with country-specific circumstances, including legal and regulatory frameworks
- maintain sensitivity in policy areas such as foreign exchange management, financial integrity, and emergency liquidity assistance
- Directors stressed the need to ensure proper prioritization of Fund membership while leveraging synergies with other Fund workstreams.
- Prioritization suggestions included:
- prioritizing middle-income countries’ and low-income countries’ central banks with significant room for improvement in transparency practices
- also incorporating countries at an advanced stage of transparency practices to facilitate peer learning
- On review scope and modality:
- Directors broadly agreed that comprehensive CBT reviews across the five pillars should be carried out for better efficacy and optimal use of resources
- Directors also saw merit in a modular approach to meet country-specific needs, especially where resources and capacity are constrained
- Directors supported staff’s proposal to continue offering CBT reviews to IMF membership as a voluntary tool to enhance central bank transparency and facilitate accountability.
- Directors suggested an annual interim update on CBT review findings to keep the Board apprised of evolving central bank transparency practices.
Staff actions and follow-up
- Based on the successful experience of pilot CBT reviews and continued interest from central banks, staff will:
- continue to conduct CBT reviews
- establish a repository of transparency practices documented during the review process
- report back to the Board in FY2026 on the progress of the CBT reviews and an update to the Code following five years of implementation
Source: IMF Executive Board Discusses the Outcomes of Central Bank Transparency Code Pilot Reviews (Press Release No. 23/72, March 15, 2023).