Fiscal Accounting of Bank Restructuring
IMF Policy Discussion Papers, May 1, 1997
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- Fiscal Accounting of Bank Restructuring
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Bibliographic details
- Authors: Andy M. Wolfe, Jeffrey M. Davis, James Daniel
- Published: May 1, 1997
- Series: IMF Policy Discussion Papers
- DOI: https://doi.org/10.5089/9781451972573.003
Problem with current fiscal classification of bank assistance
- Current guidelines and practice for classifying government bank assistance operations inadequately capture in the fiscal balance some of the most common, and important, operations.
- Shortcomings stem from:
- the focus on the general government,
- the exclusion of non-cash operations,
- divergences between the timing of cash outlays and the economic impact of assistance operations.
Proposed measure: the "augmented" balance
- Complementing the standard measures of the fiscal balance with an “augmented” balance would provide a definition that is:
- transparent,
- comprehensive,
- reasonably comparable across countries.
- The augmented balance would explicitly incorporate the major quantifiable fiscal costs of bank assistance operations that are not already included in current definitions of the overall balance.
Key findings
- Standard fiscal balance measures miss important bank assistance operations because they:
- concentrate on the general government perimeter,
- exclude non-cash interventions,
- record cash outlays at times that can differ from their economic impact.
- An augmented balance better aligns fiscal reporting with the economic substance of bank restructuring operations.
Policy implications and recommendations
- Adopt an augmented fiscal balance alongside standard measures to improve transparency and cross-country comparability of fiscal data related to bank assistance.
- Explicitly incorporate quantifiable fiscal costs of bank assistance operations that fall outside current overall-balance definitions, including non-cash operations and timing differences.
IMF Policy Discussion Paper by Andy M. Wolfe, Jeffrey M. Davis, James Daniel; May 1, 1997.
Content in this bundle
- Fisicle Accounting of Bank Restructuring - PPAA/97/5