{
  "title": "Quasi-Fiscal Implications of Central Bank Crisis Interventions",
  "publication": "IMF Working Papers, June 2, 2023",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2023/06/02/quasi-fiscal-implications-of-central-bank-crisis-interventions-534076",
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  "summary": "We develop a stylized balance sheet framework to help identify ‘quasi-fiscal’ components of central bank crisis interventions and show how sources of fiscal risk are created from both the new claims and how they are funded.",
  "sections": [
    {
      "heading": "Summary",
      "content": "- Authors: John Hooley, Ashraf Khan, Claney Lattie, Istvan Mak, Natalia Salazar, Amanda Sayegh, Peter Stella\n- Date: June 2, 2023\n- Core contribution: Develops a stylized balance sheet framework to identify ‘quasi-fiscal’ components of central bank crisis interventions and shows how sources of fiscal risk are created from both the new claims and how they are funded.\n- Data and methods: Combines central bank balance sheet data with survey evidence from intervention announcements; includes case study analysis.\n- Key intervention types examined: non-conventional lending to the financial and non-financial sectors; large-scale purchases of government securities."
    },
    {
      "heading": "Findings and analysis",
      "content": "- Quasi-fiscal components: The framework isolates elements of central bank interventions that effectively transfer financial exposure to the public sector balance sheet.\n- Sources of fiscal risk: Risks arise from (a) the new claims created by interventions and (b) the funding modalities used by central banks to support those claims.\n- Evidence from Covid-19 interventions: Documentation of risks to the public sector balance sheet from central banks’ responses to the Covid-19 crisis, including liquidity-providing repo operations, support facilities, and asset purchase facilities.\n- Cross-country variation: Case study analysis indicates that management of fiscal risks from central bank crisis interventions varies greatly across countries."
    },
    {
      "heading": "Policy implications and good practices",
      "content": "- Need for identification: Use of a stylized balance sheet framework to identify and quantify quasi-fiscal components is essential for transparency and fiscal risk assessment.\n- Risk management: Attention required to both the composition of new claims on central bank balance sheets and the funding strategies that can transfer risk to the public sector.\n- Coordination and disclosure: Implicitly suggests the value of improved coordination between monetary and fiscal authorities and clearer disclosure of intervention objectives and exposures.\n- Good practices: Case studies point to several identifiable good practices in managing fiscal risks from central bank crisis interventions (practices not enumerated in source summary).\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2023/06/02/quasi-fiscal-implications-of-central-bank-crisis-interventions-534076"
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    "Authors: John Hooley, Ashraf Khan, Claney Lattie, Istvan Mak, Natalia Salazar, Amanda Sayegh, Peter Stella",
    "Published: June 2, 2023",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798400241185.001",
    "Authors: John Hooley, Ashraf Khan, Claney Lattie, Istvan Mak, Natalia Salazar, Amanda Sayegh, Peter Stella",
    "Date: June 2, 2023",
    "Core contribution: Develops a stylized balance sheet framework to identify ‘quasi-fiscal’ components of central bank crisis interventions and shows how sources of fiscal risk are created from both the new claims and how they are funded.",
    "Data and methods: Combines central bank balance sheet data with survey evidence from intervention announcements; includes case study analysis.",
    "Key intervention types examined: non-conventional lending to the financial and non-financial sectors; large-scale purchases of government securities.",
    "Quasi-fiscal components: The framework isolates elements of central bank interventions that effectively transfer financial exposure to the public sector balance sheet.",
    "Sources of fiscal risk: Risks arise from (a) the new claims created by interventions and (b) the funding modalities used by central banks to support those claims.",
    "Evidence from Covid-19 interventions: Documentation of risks to the public sector balance sheet from central banks’ responses to the Covid-19 crisis, including liquidity-providing repo operations, support facilities, and asset purchase facilities.",
    "Cross-country variation: Case study analysis indicates that management of fiscal risks from central bank crisis interventions varies greatly across countries.",
    "Need for identification: Use of a stylized balance sheet framework to identify and quantify quasi-fiscal components is essential for transparency and fiscal risk assessment.",
    "Risk management: Attention required to both the composition of new claims on central bank balance sheets and the funding strategies that can transfer risk to the public sector.",
    "Coordination and disclosure: Implicitly suggests the value of improved coordination between monetary and fiscal authorities and clearer disclosure of intervention objectives and exposures.",
    "Good practices: Case studies point to several identifiable good practices in managing fiscal risks from central bank crisis interventions (practices not enumerated in source summary).",
    "**Working Paper**"
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