The Fiscal Abuse of Central Banks

IMF Working Papers, July 1, 1993

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This paper reviews the fiscal activities that governments in a sample of 26 developing countries have obliged their central banks to undertake.
The paper notes that not all central banks engage in all activities, and that some perform additional fiscal activities such as collecting taxes and running food procurement programs.
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."

(1) Collecting seigniorage
(2) Imposing financial restriction
(3) Implementing selective credit policies
(4) Undertaking foreign exchange operations at nonmarket-clearing prices
(5) Providing implicit or explicit deposit insurance at subsidized rates and recapitalizing insolvent financial institutions

Some central banks perform additional fiscal activities such as:
- Collecting taxes
- Running food procurement programs

Subject: Banking, Currencies, Foreign exchange, Government debt management, Inflation, Monetary base, Money, Prices, Public financial management (PFM)
Keywords: accounting convention, central bank profit, Currencies, foreign currency, Government debt management, Inflation, inflation rate, Monetary base, reserve money monopoly, WP