Getting the Dog to Bark : Disclosing Fiscal Risks from the Financial Sector

Author/Editor:

Timothy Irwin

Publication Date:

September 28, 2015

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Fiscal reporting is intended to warn of fiscal crises while there is still time to prevent them. The recent crisis thus seems to reveal a failure of fiscal reporting: before the crisis, even reports on fiscal risk typically did not mention banks as a possible source of fiscal problems. One reason for silence was that the risk arose partly from implicit guarantees, and governments may have feared that disclosure would increase moral hazard. The crisis cast doubt, however, on the effectiveness of silence in mitigating risks. This paper discusses how fiscal risks from the financial sector could be discussed in reports on fiscal risk, with a view to encouraging their mitigation.

Series:

Working Paper No. 15/208

Subject:

English

Publication Date:

September 28, 2015

ISBN/ISSN:

9781513507736/1018-5941

Stock No:

WPIEA2015208

Format:

Paper

Pages:

24

Please address any questions about this title to publications@imf.org