IMF POLICY PAPER
THE CENTRAL BANK TRANSPARENCY CODE
July 2020

IMF staff regularly produces papers proposing new IMF policies, exploring options forreform, or reviewing existing IMF policies and operations. The following documents havebeen released and are included in this package:•

A Press Release summarizing the views of the Executive Board as expressed during its
July 2, 2020 consideration of the staff report.

•

The Staff Report, prepared by IMF staff and completed on June 4, 2020 for the
Executive Board’s consideration on July 2, 2020.

[The documents listed below have been or will be separately released.]
The IMF’s transparency policy allows for the deletion of market-sensitive information andpremature disclosure of the authorities’ policy intentions in published staff reports andother documents.
Electronic copies of IMF Policy Papers
are available to the public fromhttp://www.imf.org/external/pp/ppindex.aspx

International Monetary Fund
Washington, D.C.

© 2020 International Monetary FundPR 20/258

IMF Executive Board Approves New Central BankTransparency CodeFOR IMMEDIATE RELEASE

Washington DC – July 30, 2020. On July 2nd, the Executive Board of the International
Monetary Fund (IMF) approved the new IMF Central Bank Transparency Code (CBT). The
development of the CBT follows on the Board’s direction in April 2019 to update the 1999
Monetary and Financial Policies Transparency Code, and bring it in line with therecommendations of the 2017 Joint Review of the Standards and Codes Initiative, indicating theneed for risk-based assessments to support policy effectiveness and address macroeconomic
risks.
The accompanying paper outlines the CBT’s 5-pillar framework and the proposed applicationof the CBT. It also notes that the CBT, its principles and the detailed practices, weredeveloped after extensive consultation with relevant stakeholders. The preparation of the CBT
benefited from guidance from a High-Level Advisory Panel, consisting of eminent former
central bank governors and academics, and input from an extensive consultation process withcentral banks and other relevant international organizations. These engagements will help
ensure that the CBT can provide strong, clear, and detailed guidance to central banks
regarding their own transparency. The paper also notes the importance of the CBT for policy
effectiveness and accountability in light of the wide-ranging policy measures undertaken by
central bank in recent years in response to extraordinary shocks, including from the COVID-19
pandemic.
The CBT will be applicable, on a voluntary basis, to all IMF members, including lessdeveloped economies. The modular, risk-based, and proportional set-up is well-suited totaking into account country-specific circumstances. This will also enable the CBT to serve as atailored diagnostic tool in IMF capacity development and facilitate the voluntary use of the
CBT in Financial Sector Assessment Programs and IMF surveillance, such as Article IVconsultations, and in an IMF-supported program context.
Executive Board Assessment
Directors welcomed the opportunity to consider the staff proposal for the Central BankTransparency Code (CBT) and broadly endorsed its general principles. They noted that therole of central banks–in terms of expanded mandates, unconventional policy actions andcomplex operations–has evolved considerably in response to the 2008 financial crisis and the
COVID-19 pandemic, and agreed that these changes have heightened the need for enhanced
transparency.
Directors appreciated the extensive outreach by staff in the preparation of the CBT andthanked the members of the Advisory Panel for their thoughtful guidance and contributions.
They noted that the CBT is a timely and useful tool for central banks to guide theirtransparency practices and strengthen accountability, ensuring more effective policy outcomes
and better-informed dialogue with stakeholders.

2

Directors welcomed the voluntary nature of the CBT and its relevance for all member
countries, including less-developed economies, recognizing that central banks operate indiverse environments, as highlighted in the descriptions of the range of practices for the CBTprinciples. They appreciated that these practices are not intended to be a tool for ranking thetransparency choices of central banks and welcomed the revised practice labels.
Directors welcomed the CBT’s acknowledgement of the trade-offs between transparency andthe legitimate need for confidentiality, as well as the role of country-specific circumstances,including the legal and institutional frameworks, in defining these trade-offs. They appreciatedthat the CBT recognizes these needs in the context of market sensitive issues, financial
stability considerations, and personal data, but some saw scope for a broader definition ofqualified confidentiality reasons. In the context of currency unions, a number of Directors wereconcerned that publishing voting behavior may have important trade-offs and noted the CBTshould avoid being overly prescriptive. Directors broadly endorsed the CBT principles anddescription of practices related to foreign exchange management, with some Directors callingfor caution regarding information disclosure in this area to avoid limiting central bank flexibility
and prevent speculative transactions.
Directors supported staff carrying out CBT pilot reviews on a voluntary basis and in close
cooperation with the relevant authorities, while ensuring a proper representation of Fund
membership, which could then be discussed by the Board. Given the competing demands on
authorities and on Fund resources considering the ongoing COVID-19 crisis, a number of
Directors were of the view that the two-year timeline might need to be reconsidered.
Directors supported the notion that the CBT could serve as a useful diagnostic tool in capacity
development and most thought it could be helpful for Fund surveillance, on a voluntary basis.

June 4, 2020

THE CENTRAL BANK TRANSPARENCY CODE—STAFFPROPOSALEXECUTIVE SUMMARY
The paper reports to the Executive Board on its decision of April 29, 2019, to prepare an
IMF Central Bank Transparency Code (CBT), which is linked to the 2017 Review of theStandards and Codes Initiative (RSCI), for a revision and update of the 1999 Monetaryand Financial Policies Transparency Code (MFPT). Directors asked that the CBT should
remove the overlap on financial policies covered by other international standards,
expand the transparency standards to broader set of activities undertaken by many
central banks since the 2008 financial crisis, and reorient the transparency standards tofacilitate risk-based assessments to support policy effectiveness and address
macroeconomic risks.
This paper presents a staff proposal for the CBT. The proposal builds on the
Board-approved CBT 5-pillar framework and consists of (i) central bank transparency
principles; (ii) central bank transparency practices; (iii) a glossary; and (iv) an annex with
relevant transparency related principles from financial policy standards.
The modular approach of the CBT allows for a voluntary and proportional applicationthat takes into account country-specific circumstances. The CBT could also be used bycentral banks to map their transparency frameworks and make informed choices on
their transparency arrangements. The CBT is not intended to serve as a central bankgovernance framework.
Extensive stakeholder consultation provided important input. This includes feedback
from a High-Level Advisory Panel consisting of eminent former central bank governors
and academics, central banks and monetary unions, and international organizations andstandard setters. Notably, their suggestions on issues related to the appropriatebalance between transparency and confidentiality helped improve the CBT’s flexibility
to take account of the diversity of transparency practices across jurisdictions reflecting
different legal and structural backgrounds.
The CBT will support Fund capacity building activities Technical Assistance (TA) and
Financial Sector Stability Reviews (FSSR); Surveillance—Article IV Consultations andFinancial Sector Stability Programs (FSAP)]; Use of Fund Resources (UFR); and in the
Fund’s Good Governance Framework for enhanced Fund engagement on governance.
Staff is seeking Board endorsement of the proposed CBT.

THE CENTRAL BANK TRANSPARENCY CODE—STAFF PROPOSAL

Approved By
Tobias Adrian

Prepared by an inter-departmental team led by Ghiath Shabsigh andAshraf Khan, and includes: Nombulelo Braiton, Mark Buessing-Loercks,
Elie Chamoun, Udaibir Das, Mariam El Hamiani Khatat, Chady El
Khoury, Tomoaki Hayashi, Grace Jackson, Barend Jansen, Aldona
Jociene, Gunes Kamber, Elias Kazarian, Annamaria Kokenyne Ivanics,
Dimitrios Laliotis, Arkadiusz Majewski, Catalina Margulis, EmmanuelMathias, Mowele Mohlala, Paola Morales Acevedo, Erlend Nier,
Svetlana Popova, Asad Qureshi, Umang Rawat, Hans Weenink, Rudy
Wytenburg, and Matevz Zbasnik. Production assistance was provided
by Javier Chang and Helen Hwang.

CONTENTS
Glossary __________________________________________________________________________________________ 3
INTRODUCTION _________________________________________________________________________________ 4
THE CENTRAL BANK TRANSPARENCY CODE: KEY FEATURES _________________________________ 4
CONSULTATION PROCESS ______________________________________________________________________ 8
SUMMARY AND NEXT STEPS __________________________________________________________________ 12
ISSUES FOR DISCUSSION ______________________________________________________________________ 12

BOX
1. Central Bank Transparency Code—Advisory Panel _____________________________________________ 8
FIGURES
1. Five Pillar Framework___________________________________________________________________________ 5
2. CBT Feedback _________________________________________________________________________________ 10

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THE CENTRAL BANK TRANSPARENCY CODE—STAFF PROPOSAL

Glossary
AML/CFT
AP
BCBS
BCP
CBLD
CBT
COFER
ECB
EMs
FATF
FIU
FMI
FSAP
FSB
FSSR
HIC
IAIS
IMF
IOSCO
IRFCL
LIC
LMIC
MFPT
RSCI
S&C
SDDS
UFR
UMIC
UMP

Anti-Money Laundering and Countering the Financing of Terrorism
Central Bank Transparency, Advisory Panel
Basel Committee on Banking Supervision
Basel Core Principles for Effective Banking Supervision
Central Bank Legislation Database
Central Bank Transparency CodeComposition of Foreign Exchange Reserves
European Central Bank
Emerging Markets
Financial Action Task Force
Financial Intelligence Unit
Financial Market Infrastructure
Financial Sector Assessment Program
Financial Stability Board
Financial Sector Stability Review
High-Income Countries
International Association of Insurance Supervisors
International Monetary FundInternational Organization of Securities Commissions
International Reserves and Foreign Currency Liquidity
Low-Income Countries
Lower Middle-Income Countries
IMF Code of Good Practices on Transparency in Monetary and
Financial Policies
Review of the Standards and Codes Initiative
Standards and Codes
Special Data Dissemination Standard
Use of Fund Resources
Upper Middle-Income Countries
Unconventional Monetary Policies

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THE CENTRAL BANK TRANSPARENCY CODE—STAFF PROPOSALINTRODUCTION
1.
The Executive Board endorsed on April 29, 2019, the staff proposal to replace the
MFPT with a new CBT. The proposed change is needed to remove the overlap in the MFPT withtransparency elements of financial policies covered by other international standards, and to facilitate
policy effectiveness through greater transparency in light of the emerging challenges facing central
banks since the 2008 financial crisis in terms of expanded mandates, functions, powers and policy
tools. Additionally, the on-going global response to the COVID-19 epidemic, where central banks
have taken an active and critical role including through unconventional measures, has further
reinforced the need for central banks to adopt greater transparency to maintain public trust andpolicy effectiveness.
2.
The Board generally viewed the proposed CBT as an appropriate framework to remove
the overlap on financial policies covered by other international standards, and expand thetransparency standards to a broader set of activities and practices undertaken by many
central banks. The CBT would also reorient transparency standards to facilitate risk-based
assessments,1 to support policy effectiveness and address macroeconomic risks, in line with therecommendations of the 2017 RSCI.
3.
The Board called on the CBT to be relevant and balanced. In particular, the CBT should(a) be relevant to all member countries; (b) help facilitate a risk-based and proportional application
while considering country specific circumstances and needs; (c) not be viewed as a central bankgovernance framework, nor as a means to assess the governance of central banks; and (d) strike theappropriate balance between transparency and the legitimate need for confidentiality.
4.
This paper presents a staff proposal for the CBT. The next section discusses the key
features of the CBT. The subsequent section presents the results of the extensive stakeholder
consultation process used to refine the CBT further.

THE CENTRAL BANK TRANSPARENCY CODE:
KEY FEATURES
5.
The CBT is a voluntary code, composed of a comprehensive, central bank-focused setof principles and practices (Attachment). The CBT is solely focused on central banks, and aims toencompass their broad range of mandates, governance frameworks, and institutional arrangements.
6.
The CBT’s 5-pillar framework covers central bank governance, policies, operations, outcome,and official relations; thereby covering transparency in every area of central banking (Figure 1):
a. Pillar I. Transparency in governance, covering institutional issues.
1 Risk-based assessments take into account the country-specific context, and the key risks the country as well as thecentral bank in particular face at a given point in time.

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THE CENTRAL BANK TRANSPARENCY CODE—STAFF PROPOSAL

b. Pillar II. Transparency in policies, focusing on the economics of the central bank policy
decisions.
c.

Pillar III. Transparency in operations, highlighting how policy decisions are implemented.

d. Pillar IV. Transparency in outcome, focusing on how the outcome of central bank policies
and other actions are reported to stakeholders to facilitate accountability.
e. Pillar V. Transparency in official relations, covering the central bank interaction with thegovernment and other domestic agencies, and international relations and commitments.

7.
Enhanced transparency practices advocated by the CBT reflect the evolution of central
banks’ roles and responsibilities over the past decade. As noted in the Fund’s Policy Paper ofApril 2019,2 many central banks resorted to unconventional measures (including quantitative easing,
forward guidance, lender and market-maker of last resort operations) in pursuit of their financial andprice stability objectives following the 2008 financial crisis. As part of the emergency responses to
COVID-19 outbreak, central banks announced further measures that required close coordination
with, and backing by, ministries of finance. The unconventional nature and the immense scale ofthese measures, including the interlinkages with fiscal policies and impact on public welfare,
2 IMF Policy Paper, 2019, Staff Proposal to Update the Monetary and Financial Policies Transparency Code.

Washington, D.C., International Monetary Fund.

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THE CENTRAL BANK TRANSPARENCY CODE—STAFF PROPOSAL

represent an evolution of central bank roles in response to unprecedented challenges. These
measures call for enhanced transparency for central banks to underpin their actions as autonomousand accountable public institutions.
8.
The CBT removes the overlap on financial policies covered by other international
standards. Selected transparency related principles of financial policies covered by otherinternational standards are presented in a separate Annex for information purposes only. The Annex
will not be used for assessing compliance with the CBT, nor does it contain a description of therange of practices on transparency as related to banking, insurance, securities, resolution authority,and financial markets infrastructures.
9.
The CBT is intended to allow central banks to map their transparency frameworks,
improve the dialogue with their stakeholders, and contribute to policy effectiveness. Central
banks could assess their existing transparency frameworks using the CBT and allow for more
informed central bank choices on transparency and more effective communication between thecentral bank and its various stakeholders. In doing so, a better understanding of the rationale forcentral bank mandate, governance, policies, operations, outcomes, and official relations will reduce
uncertainty and facilitate a public dialogue that can anchor public expectations and foster better
policies. The CBT will also assist central banks in explaining that the absence of disclosure of specificinformation (for instance, on individual microprudential supervision cases) does not necessary imply
lacking transparency.
10.
The CBT provides a range of practices of how the CBT principles could be
implemented. The practices reflect the design of the CBT to be relevant to all Fund member
countries’ central banks and their diverse backgrounds, including with respect to legal frameworks,
governance arrangements and levels of economic and financial development. It is against thisbackground that central bank transparency choices should be considered and evaluated. The rangeof practices will help central banks and their stakeholders to determine if central bank transparency
in practice is balanced, given the country-specific circumstances. The practices are not intended to
be a tool for transparency ranking of central banks.
11.
The CBT recognizes the necessity to balance transparency and central banks’legitimate need for confidentiality. The application of transparency in a central bank context
cannot be indiscriminate or excessive as there are many central bank activities where there might belegitimate needs for confidentiality. The CBT identifies confidentiality needs in the contexts ofmarket sensitive information, financial stability considerations, and personal data. The CBT
recognizes the diversity of transparency practices across jurisdictions reflecting different legal, andstructural backgrounds. Therefore, the CBT follows a two-pronged approach:a. Transparency requirements throughout the CBT are qualified with respect to market
sensitive information, financial stability considerations, and personal data.

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b. In Pillar I, the principle of confidentiality calls for the articulation of a clear confidentiality
policy that explains and justifies the choices made by central banks on the disclosure ofsensitive information, as well as those emanating from legal and other obligations.
12.

Some of the key factors considered in drafting the CBT include:a. The contribution of central bank transparency to increased policy effectiveness andenhanced accountability.
b. The balance between transparency and legitimate needs for confidentiality.
c.

The monetary policy practices of central banks in recent years, that altered many of thenorms that underpinned the traditional transparency principles related to monetary
policy, including the use of unconventional measures and expanded balance sheets.

d. The broadening of mandates, functions, and powers—both de jure and de facto—of
central banks, including macroprudential oversight, crisis management, resolution
authority, and other objectives (e.g., financial integrity and consumer protection).
e. The need for the CBT to be practical and flexible to cover diverse central banking
environments.
f.

The Fund’s approach to governance issues. In April 2018, the Board approved aframework for enhanced Fund engagement on governance and corruption.3 The
framework aims at assessing governance vulnerabilities and their macroeconomic impact
in the context of surveillance and in Fund-supported programs. This new framework
includes a central bank governance component examining several aspects, including,most importantly, transparency and accountability arrangements.

13.
The CBT can serve as a diagnostic tool in capacity development. The CBT provides a toolthat would enable the delineation of transparency benchmarks and allow graduated assessment ofcentral banks’ transparency practices, helping countries plan, implement, and monitor reform efforts.
This could assist authorities in providing well-founded information on efforts to reform central banktransparency and related issues and communicate effectively with their stakeholders. The CBT will
also provide useful tool for the Fund to assist member countries’ central banks, through capacity
development and FSSR, in strengthening their transparency practices.
14.
The CBT framework could help support Fund surveillance. When applied to a member
country, the framework will help highlight the strengths and weaknesses of the central banks’transparency practices and their relative importance in the context of the country’s circumstances.
The scope to undertake modular assessments of the components of the code would allow aprioritization of recommendations through a transparency action plan that could be monitored,

3 IMF, 2018b, Review of 1997 Guidance Note on Governance—A Proposed Framework for Enhanced Fund Engagement.

Washington, D.C., International Monetary Fund.

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THE CENTRAL BANK TRANSPARENCY CODE—STAFF PROPOSAL

depending on country-specific priorities, in the context of Article IV surveillance, FSAPs, andUse-of-Fund Resources.4

CONSULTATION PROCESS
15.
In the process of drafting the CBT, extensive consultations with various stakeholders
took place. At the April 29, 2019 Executive Board meeting, Directors supported the staff proposal toconvene an international advisory group, composed of members from diverse backgrounds, toprovide guidance to staff in the elaboration of the new code, and noted the need to engage the
Executive Board, central banks, and other relevant international institutions.

International Advisory Panel16.

An international High-Level Advisory Panel (AP) was convened in late summer of 2019.

The AP is composed of eminent former central banks’ governors and academics, with diverse
backgrounds in terms of experiences and regional representations (Box 1). In addition to several
rounds of written comments, staff held three meetings with the AP members, through a series ofvirtual meetings and conference calls in October and December 2019, and in March 2020,5 anddiscussed the CBT’s principles and practices, as well as central banks’ comments on the CBT andstaff responses.
Box 1. Central Bank Transparency Code—Advisory Panel
Ms. Aziz, Zeti Akthar
Mr. Blinder, Alan
Mr. De Gregorio, José
Mr. El Okdah, Farouk
Ms. Geraats, Petra

Former Governor, Bank Negara Malaysia
Academic, Princeton University
Former Governor, Central Bank of Chile
Former Governor, Central Bank of Egypt
Academic, Cambridge University

Mr. Ndulu, Benno
Mr. Praet, Peter
Mr. Reddy, Y.V.
Mr. Shirakawa, Masaaki
Mr. Tarullo, Daniel

Former Governor, Central Bank of Tanzania
Former ECB Executive Board Member
Former Governor, Reserve Bank of India
Former Governor, Bank of Japan
Former Governor, US Federal Reserve

17.
The AP provided valuable advice and insights during the process of developing anddrafting the CBT and helped shape the final outcome. Key issues raised by the AP include:

4 The CBT could also assist central banks in meeting certain requirements on aspects of transparency andaccountability under the IMF safeguards policy.

5 The last meeting was planned to be held at HQ on March 16, 2020. As a result of the Covid-19 epidemic, the HQ

meeting was replaced by a series of conference calls that took place during the week of March 23, 2020.

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THE CENTRAL BANK TRANSPARENCY CODE—STAFF PROPOSAL

a. Further nuancing the balance between transparency and confidentiality.
b. Ensuring a clear focus on transparency requirements versus governance aspects.
c.

Finetuning, inter alia, of issues relating to transparency of central bank autonomy, risk
management and audit, financial stability and stress testing, and inter-agency
cooperation.

d. Incorporating transparency of human capital management and code-of-ethics.
e. Clarifying the approach to external accountability by further strengthening thedescriptions of practices under Pillar IV.
These issues were addressed by incorporating additional language in the CBT’s introduction on
confidentiality, deleting remaining governance aspects from the CBT, adding explicit references tohuman capital management in the CBT, strengthening the presentation of anti-corruption measuresand internal code-of-conduct, and clarifying and consolidating the discussions on external
accountability in Pillar IV. The relevant transparency practices were adjusted accordingly.

Executive Board
18.

The staff engaged the Board on the CBT several times. This includes:a. Staff presentation on November 20, 2019, to discuss the staff’s approach to developing
the CBT, the CBT’s high-level principles, and the consultation process.
b. Informal meeting-to-engage on March 4, 2020, to discuss the CBT Exposure Draft.
c.

19.

Two virtual iLab sessions on May 5 and 7, 2020, to discuss staff’s response to central
banks’ comments on the CBT Exposure Draft.

Directors highlighted several issues, including:a. Clarifying the voluntary nature of the CBT and its application in Fund surveillance andcapacity building, and that the adoption of transparency practices is dependent on
country-specific situations.
b. Refining the balance between transparency and confidentiality.
c.

Removing any remaining references to central bank governance aspects.

d. Finetuning descriptions of risk management, audit, and financial stability.
e. Ensuring consistency of legal language throughout the CBT.
These issues were addressed by explicitly noting that the CBT is voluntary, expanding the examples
of how the CBT could be applied, and through a review by the IMF’s Legal Department. Issues
relating to finetuning descriptions, deleting remaining governance aspects and strengthening thelanguage on confidentiality were incorporated (taking suggestions from the Advisory Panel into
account).

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THE CENTRAL BANK TRANSPARENCY CODE—STAFF PROPOSAL

Central Banks and Relevant International Organizations
20.
The Exposure Draft of the CBT was circulated in late January 2020 to external
stakeholders. The CBT Exposure Draft was shared with central banks and monetary unions worldwide, as well as with the Bank for International Settlements, the World Bank, and financial policy
standard-setters: Basel Committee of Banking Supervision (BCBS), International Association of
Insurance Supervisors (IAIS), International Organization of Securities Commissions (IOSCO), and the
Financial Action Task Force (FATF).
21.
The CBT Exposure Draft elicited strong participation. Staff received formal responses via
the online CBT feedback form and other interactions from 75 organizations in total. This included 73
central banks and monetary unions, and 2 international organizations (see figure 2). It should be
noted that the response from countries in the European region includes 15 eurozone countries that
did not submit separate comments, but for whom the European Central Bank (ECB) indicated that its
response was coordinated with and on behalf of those national central banks.
Figure 2. CBT Feedback
Responses by Region
11% 3%

8%

49%

13%

16%
EUR

APD

WHD

AFR

MCD

Int'l Org.

Source: IMF staff

22.
Central banks and international organizations broadly supported the CBT. They broadly
recognized the relevance of the CBT, particularly in the context of expanded mandates; noted theconsistency with the MFPT and other international standards; reiterated support for removing theoverlap with other financial policy standards; supported the CBT 5-pillar framework; and broadly
acknowledged the CBT’s balance between transparency and confidentiality. Around 8 percent ofcentral bank respondents provided CBT-based assessments of certain elements of their current
transparency practices. Most of the comments were intended for clarification, including on
terminology.6 Comments that are of broader relevance include:

6 Some central banks suggested expanding the CBT to cover certain governance aspects (e.g., strengthening central

bank autonomy; support for whistleblowing arrangements; including a minimum term for the Governor), or to
include other agencies into the CBT coverage. These suggestions were not incorporated as they fell outside of the
CBT’s scope, that is, focusing on central bank transparency irrespective of central bank governance arrangements.

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THE CENTRAL BANK TRANSPARENCY CODE—STAFF PROPOSAL

a. The nature of the CBT. Clarify the voluntary nature of the CBT, and the use of practices,
particularly concerns about using the CBT practices to rank central banks.
b. Legal framework. Take note of domestic legal frameworks that would require central
banks to be transparent about various topics (e.g., Freedom of Information laws), or
instead would require them to maintain confidentiality on specific points, as well as
recognize the specifics of the legal framework applying to central banks that are part ofa currency union.
c.

Independence/Autonomy: Clarify the difference between the two terms, expand theclarification of goal and instrument autonomy, and further enhance the components offinancial autonomy in particular.

d. Risk management. Clarify coverage of certain types of risk (i.e., compliance andstrategic risk) and concerns related to exposing central bank to risks by disclosing
information about risks and mitigation strategies.
e. Code of conduct. Expand this area, particularly in the good and advanced practices;
including transparency on the presence of Ethics Officers, as well as transparency overthe use, protection, and preservation of information, and mechanisms for preventing
conflicts of interest.
f.

Confidentiality. Further clarify the approach to confidentiality, including links to thelegal framework, as noted above under point b.

g. Decision-making process. Further clarify the practices with respect to policy decision
making and disclosure of supporting analysis to ensure the achievement of policy
objectives and prevent excessive speculation.
h. Foreign exchange management. Clarify transparency practices regarding the timing
and scale of foreign exchange management and interventions, especially when
operations occur and tactics.
i.

Foreign exchange reserve management. Disclosure of composition of reserve assets,
short-term liabilities, and drains should follow related codes of conduct (International
Reserves and Foreign Currency Liquidity (IRFCL); Composition of Foreign Exchange
Reserves (COFER); and Special Data Dissemination Standard (SDDS).

j.

Financial integrity. Clarify the Anti-Money Laundering and Countering the Financing ofTerrorism (AML/CFT) components relating to “internal activities” of central banks
themselves as compared to their role as AML/CFT supervisor.

These comments were addressed by detailed changes to the relevant transparency practices, whichwere subsequently shared with Directors to ensure that comments from central banks had been

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carefully taken into account. Aspects relating to the nature of the CBT and the role of the legal
framework were included in the CBT’s introduction.

SUMMARY AND NEXT STEPS
23.
This paper contains a staff proposal for the IMF Central Bank Transparency Code. The
paper responds to the decision made by the Executive Board on April 29, 2019, building on the 2017
RSCI.
24.
The CBT enhances the efficiency of Fund work. The CBT eliminates the overlap withinternational financial standards adopted since the MFPT was created, improves the effectiveness ofFund work by expanding the transparency criteria to the broader set of activities undertaken by
central banks since the 2008 financial crisis, and creates cost-effectiveness by facilitating risk-based
assessments to support policy effectiveness and address macroeconomic and financial risks.
25.
The CBT contributes to central bank policy effectiveness and accountability. The CBTwill facilitate more effective communication between the central bank and its various stakeholders,
reducing uncertainty and anchor public expectations, and contributing to better policy choices andenhanced accountability.
26.
Pilot assessments. The staff proposes to carry out several CBT reviews on voluntary basis
over the next two years, in collaboration with the relevant authorities. The countries participating
will be reflective of IMF membership, cover the diversity of regions, income levels, and exchange
rate regimes, and the outcome will be reported to the Board in the form of aggregate analysis. The
outcome of the pilots will also be used to develop a guidance note and template for futurevoluntary applications of the CBT in FSAP, AIV or UFR discussions. The staff are looking forward to
conduct four to six reviews in the pilot phase. The staff has not yet approached any central bank forthe purpose of conducting the pilot reviews. However, six central banks from various regions of theworld have already used the CBT’s Exposure Draft to gauge their existing transparency practices.
Additionally, one (emerging market) central bank indicated that it has established an internal
working group to continue mapping its transparency practices for all its functions, as part of its own
strategic planning.

ISSUES FOR DISCUSSION•

Do Directors agree with staff’s CBT proposal as attached to this paper?

•

Do Directors agree that staff carry out CBT pilot reviews, in consultation with the authorities andon voluntary basis, and report the outcome to the Board?

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Attachment. The Central Bank Transparency CodeIntroduction
1.

Central bank transparency is important for effective monetary and financial

policies. Transparency is critical to guiding the decisions of economic agents andstabilizing market expectations and conduct, both of which boost the effectiveness ofmonetary and financial policies. Transparency is also key to ensuring public
accountability of central banks and their autonomy/independence, with the latter
underpinning the operational effectiveness of central banks. Effective central banktransparency arrangements are one of the sound principles of monetary policy. 1
2.

The impact of the 2008 financial crisis, reinforced by the COVID-19

pandemic, has heightened the importance of central bank transparency andbroadened bank mandates, functions, and powers—both de jure and de facto.
Central banks’ response to the crises has altered many of the norms that undergird
traditional transparency principles related to monetary and financial policies. Central
banks have expanded their balance sheets significantly, often using unconventionalmonetary policies to support price stability objectives. Increasingly, they have been
given a financial stability mandate that informs their monetary policy actions anddecisions. In addition to the expansion of monetary policy instruments, many central
banks have seen their financial stability functions broadened to encompass
macroprudential oversight, crisis management, and resolution. In general, central bankmandates vary widely, with some central banks assuming responsibility for areas suchas anti-money laundering/countering the financing of terrorism (AML/CFT) supervisionand consumer protection.
3.

Transparency is a key element of central bank accountability. Transparency

refers to the flow and accessibility of information from the central bank to its
stakeholders and the public. They rely on that information to inform their judgment of
the performance of the central bank and compliance with the central bank’s mandate.

1 See Evolving Monetary Policy Frameworks in Low-Income Countries and Other Developing Countries. 2015.

Washington, DC: International Monetary Fund.

THE CENTRAL BANK TRANSPARENCY CODE

Transparency is also a key plank in the central bank’s broader governance andaccountability framework.
4.

An update of the International Monetary Fund’s code on central banktransparency was overdue. The 1999 IMF “Code of Good Practices on Transparency inMonetary and Financial Policies”2 (MFPT, one of the Key Standards developed by theIMF),3 identified desirable transparency practices for central banks and other financial
agencies. However, an update of the MFPT was needed, given (i) advances in thedevelopment of international standards for financial policies since 1999; (ii) monetary
policy practices of many central banks since the 2008 financial crisis; (iii) the broadeningof mandates, functions, and powers—both de jure and de facto—of central banks inrecent years; (iv) the 2017 IMF “Review of the Standards and Codes Initiative”
recommendation to gear the Fund’s transparency guidance toward facilitating theimplementation of policy objectives; and (v) the Fund’s enhanced approach to good
governance issues.
5.

On April 29, 2019, the Executive Board of the IMF endorsed a staff proposal

to replace the 1999 Monetary and Financial Policies Transparency Code (MFPT)
with a new Central Bank Transparency Code (CBT). The CBT is a comprehensive setof principles and practices that apply to all central banks, regardless of their mandates,
governance frameworks, and institutional arrangements. The CBT’s five-pillar frameworkcomprises transparency on central bank governance, policies, operations, outcome, andofficial relations, covering transparency in every area of central banking.
6.

The CBT better reflects the new realities of central banking. Instead of

focusing mostly on the disclosure of operational processes, the CBT is geared towardfacilitating the implementation of policy objectives to support policy effectiveness andat addressing macroeconomic risks. The CBT recognizes that central banks operate
under diverse circumstances and levels of economic and financial development. This

2 See Code of Good Practices on Transparency in Monetary and Financial Policies: Declaration of Principles. 1999.

Washington, DC: International Monetary Fund. The Code was endorsed by the Interim Committee of the IMF Boardof Governors in its September 26, 1999 Communiqué, which urged all member countries to implement it.
3 In addition to the MFPT, the Standard and Codes developed by the IMF includes the Fiscal Transparency Code andthe Special Data Dissemination Standard.

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recognition facilitates assessments of transparency that are outcome-focused, modular,
risk-based, and proportional.
7.

The CBT will allow central banks to shape their accountability and increase

their policy effectiveness. Central banks could assess their existing transparency
frameworks using the CBT. This will allow for more informed central bank choices ontransparency—or will allow central banks to highlight choices they are faced with, forinstance due to their domestic legal frameworks. These choices will facilitate discussions
between the central bank and its various stakeholders on the rationale for central bankgovernance, policy, operations, outcome, and official relations. Such a dialogue will
reduce uncertainty, for instance, about the central bank’s mandate, its confidentiality
policy, its interaction with stakeholders, and its operations in various areas. Accordingly,
central bank transparency will help to explain what it is the central bank does, how it
does it, and what the results are. Not only will this allow the central bank to be held
accountable for its actions, it will also feed back into the policy choices the central bankmakes—allowing for a continued improvement.
8.

The CBT recognizes that applying transparency in a central bank context

cannot be indiscriminate or excessive, as many central bank activities have alegitimate need for confidentiality. As the MFPT noted: “Transparency is not an end
in itself, nor is transparency a substitute for pursuing sound policies; rather,transparency and sound policies are better seen as complements.”4
9.

The degree of a central bank’s transparency is shaped by its legal

framework. Some central banks might be subject to domestic legal and regulatory
frameworks that restrict central banks’ ability to be transparent about specificinformation (e.g., personal data or information subject to commercial or trade secrecy
provisions). Alternatively, other domestic laws and regulations could require the central
bank to be transparent, for example, in the form of “freedom of information” laws. Also,
obligations stemming from membership in a currency union or other international

4 MFPT (1999), p. 7, para. 12.

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official requirements might subject central banks to additional information-sharing
agreements.
10.

The CBT strives to strike a balance between transparency and the legitimate

needs for confidentiality. The CBT views confidentiality in the context of marketsensitive information, financial stability considerations, and personal data.
Confidentiality is particularly pertinent in key areas, including foreign exchangeinterventions, reserve management, supervisory decisions on individual institutions, andemergency liquidity assistance. The CBT recognizes that a diversity of transparency
practices across jurisdictions reflect different legal, structural, and cultural backgrounds.
Therefore, the CBT follows a two-pronged approach:a. Transparency requirements throughout the CBT are qualified for market
sensitive information, financial stability considerations, and personal data.
b. Central banks should articulate a clear confidentiality policy to explain andjustify their choices on the disclosure of sensitive information, as well as thoseemanating from legal and other obligations.
11.

The CBT is a voluntary code, intended to help central banks assess theirtransparency frameworks and facilitate informed dialogue with their stakeholders.
The CBT will help central banks map their transparency against a range of practices,
allowing for more informed central bank choices on transparency arrangements. The
CBT also stresses transparency of central banks’ legal frameworks, as these play a role inshaping the central banks’ degree of transparency. The CBT will facilitate informed
discussions between the central bank and its various stakeholders on transparency
choices. It will, for example, assist central banks in explaining that the absence of
information or a lag in its publication (relating to foreign exchange interventions, forinstance) does not necessarily imply a lack of transparency or mean that transparency
should always be absolute. On the other hand, the CBT calls for a stronger commitment
to transparency commensurate with central banks’ mandates.
12.

The CBT applies only to central banks. When a central bank shares a function

with one or more other agencies (such as a financial supervisor), transparency of thoseagencies would not be subject to the CBT. When a central bank is part of a monetary
union, national central banks may have delegated individual functions to other
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members of the monetary union, while other functions continue to be the responsibilityof individual national central banks. In such a case, the CBT should be applied to thetransparency framework both at the level of the monetary union and of each national
central bank.
13.

The CBT will not assess central bank functions like micro-prudential

supervision (banking or insurance), securities regulation, resolution, or financial
market infrastructure responsibilities. These areas already have establishedinternational standards. The Annex presents selected excerpts from these standards that
relate to transparency, for informational purposes only. The Annex is not to be used forassessing central banks’ transparency practices and does not describe practices on thetransparency of banking, insurance, and securities sectors’ supervisors, resolution
authorities, and financial market infrastructures. The transparency issues in the Annex
will not be assessed in the context of the CBT, but rather by respective assessors inbanking, insurance, securities, resolution, and financial market infrastructures.
14.

The CBT comprises five “Transparency Pillars,” each representing different

transparency elements (Figure 1):
a. Pillar I. Transparency in governance, covering institutional issues.
b. Pillar II. Transparency in policies, including its framework and decisionmaking process.
c. Pillar III. Transparency in operations, highlighting how policy decisions are
implemented.
d. Pillar IV. Transparency in outcome, focusing on how the outcome of central
bank policies and other actions are reported to stakeholders to facilitate
accountability.
e. Pillar V. Transparency in official relations, covering central bank interactions
with the government and other domestic agencies, and international
relations and commitments.

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Figure 1. Central Bank Transparency: Five-Pillar Framework

Source: IMF Staff

15.
The rest of this document is organized as follows: The CBT principles are presented in
section A. Section B provides descriptions of a range of practices, broken down by principle. Key
definitions are presented in the Glossary in section C. Finally, the Annex contains selectedtransparency-related principles from international financial policy standards, which are included for
informational purposes only.

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Contents
Acronyms .................................................................................................................................................................................... 9
A. Central Bank Transparency Principles .................................................................................................................10
Pillar I—Central Bank Governance .............................................................................................................................10
Pillar II—Central Bank Policies .....................................................................................................................................12
Pillar III—Central Bank Operations ............................................................................................................................14
Pillar IV—Central Bank Outcome................................................................................................................................16
Pillar V—Central Bank Official Relations..................................................................................................................18
A. DESCRIPTION OF CORE, EXPANDED, AND COMPREHENSIVE PRACTICES BY PRINCIPLE .............20
PILLAR I—GOVERNANCE ....................................................................................................................................................20
Legal Structure...................................................................................................................................................................20
Mandate ...............................................................................................................................................................................22
Autonomy ............................................................................................................................................................................24
Decision-making Arrangement ...................................................................................................................................27
Risk Management.............................................................................................................................................................28
Accountability Framework ............................................................................................................................................32
Communication .................................................................................................................................................................39
Confidentiality....................................................................................................................................................................40
PILLAR II—POLICIES ..............................................................................................................................................................41
Monetary Policy ................................................................................................................................................................41
Cross-Border Financial Flows and Foreign Exchange Administration ..........................................................43
Foreign Exchange Management .................................................................................................................................46
Foreign Exchange Reserve Management ................................................................................................................48
Macroprudential Policy ..................................................................................................................................................49
Microprudential Supervision ........................................................................................................................................51
Emergency Liquidity Assistance ..................................................................................................................................51
Resolution............................................................................................................................................................................52
Financial Market Infrastructures .................................................................................................................................52
Financial Integrity .............................................................................................................................................................52
Consumer Protection ......................................................................................................................................................53
PILLAR III—OPERATIONS ....................................................................................................................................................53
Monetary Policy ................................................................................................................................................................53
Cross-Border Financial Flows and Foreign Exchange Administration ..........................................................56
Foreign Exchange Management .................................................................................................................................59
Foreign Exchange Reserve Management ................................................................................................................61
Financial Stability Assessments and Stress Testing .............................................................................................63
Macroprudential Policy ..................................................................................................................................................65
Microprudential Supervision ........................................................................................................................................66
Emergency Liquidity Assistance ..................................................................................................................................66
Resolution............................................................................................................................................................................67

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Financial Market Infrastructures .................................................................................................................................67
Financial Integrity .............................................................................................................................................................68
Consumer Protection ......................................................................................................................................................69
PILLAR IV—OUTCOME.........................................................................................................................................................69
Monetary Policy ................................................................................................................................................................69
Cross-Border Financial Flows and Foreign Exchange Administration ..........................................................71
Foreign Exchange Management .................................................................................................................................74
Foreign Exchange Reserve Management ................................................................................................................76
Macroprudential Policy ..................................................................................................................................................77
Microprudential Supervision ........................................................................................................................................78
Emergency Liquidity Assistance ..................................................................................................................................78
Resolution............................................................................................................................................................................79
Financial Market Infrastructures .................................................................................................................................79
Financial Integrity .............................................................................................................................................................79
Consumer Protection ......................................................................................................................................................80
PILLAR V—OFFICIAL RELATIONS .....................................................................................................................................80
Government ........................................................................................................................................................................80
5.1.2........................................................................................................................................................................................81
5.1.3........................................................................................................................................................................................81
5.1.4........................................................................................................................................................................................81
Domestic Financial Agencies........................................................................................................................................82
Foreign Agencies ..............................................................................................................................................................83
Other Relations..................................................................................................................................................................84
5.4.1........................................................................................................................................................................................85
C. GLOSSARY ..........................................................................................................................................................................86
ANNEX I. SELECTED PRINCIPLES FROM INTERNATIONAL FINANCIAL POLICY STANDARDS .................93
A. Banking, Insurance, and Securities .......................................................................................................................96
B. Resolution.................................................................................................................................................................... 108
C. Financial Market Infrastructures ......................................................................................................................... 112

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THE CENTRAL BANK TRANSPARENCY CODEACRONYMS
AML/CFT

Anti-Money Laundering/Countering the Financing of Terrorism

BCBS

Basel Committee on Banking Supervision

BCP

Basel Core Principles for Effective Banking Supervision

CBT

IMF Central Bank Transparency Code

CCP

Central Counterparty Clearing House

CSD

Central Securities Depository

CPSS

Committee on Payments and Settlement Systems

EC

Essential Criterion

ELA

Emergency Liquidity AssistanceEN

Explanatory Notes

FMI

Financial Market Infrastructures

FS

Financial Stability

FSB

Financial Stability Board

IAIS

International Association of Insurance Supervisors

ICP

Insurance Core Principles

IOSCO

International Organization of Securities CommissionsKA

Key Attributes of Effective Resolution Regimes for Financial Institutions

ML/TF

Money Laundering/Terrorist Financing

PFMI

Principles for Financial Market Infrastructures

SSS

Securities Settlement System

TR

Trade Repositories

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A. Central Bank Transparency Principles
General Principle on Central Bank Transparency
To strengthen their accountability, and as a prerequisite for their autonomy, whilst taking legitimate
needs for confidentiality into account, central banks disclose their governance, policies, operations, andoutcome of their policies and operations, as well as the official relations they maintain withgovernment, domestic, foreign, and international agencies, and other institutions.
Pillar I—Central Bank Governance1.1. Legal Structure: The central bank discloses its legal framework to the public in a manner that isclear and easily accessible.
Selected principles from BCP, ICP, IOSCO, KA, and PFMI (see Annex).

1.2. Mandate: The central bank discloses its mandate—including its objectives, functions, and legallydefined powers—in a manner that is clear and easily accessible to the public.
Selected principles from BCP, ICP, IOSCO, KA, and PFMI (see Annex).

1.3. Autonomy: The central bank discloses its autonomy—as defined in relevant legislation or
regulations, allowing it to reveal the extent to which it is autonomous or not, in what forms, and underwhich conditions—in a manner that is clear and easily accessible for the public.
Selected principles from BCP, ICP, IOSCO, KA, and PFMI (see Annex).
1.3.1. Institutional/Operational Autonomy: There is clarity on whether the central bankis prohibited from seeking or taking instructions from any private or public body.
The extent to which the central bank’s autonomy varies for the various elements of
its mandate is clearly disclosed. Where appropriate, a central bank’s governing law
clarifies whether it has goal or instrument autonomy concerning its various
objectives.
1.3.2. Functional Autonomy: There is clarity on whether the central bank can perform its
duties without prior approval from the government.
1.3.3. Personal Autonomy: Whether there is security of tenure for the members of thecentral bank’s decision-making bodies is clear, as is the nature of such security. In
this respect, security of tenure encompasses the eligibility and disqualification
criteria for the appointment of the members of a central bank’s decision-making
bodies, the appointment procedure, the dismissal criteria and procedure, theirremuneration, and the duration of their tenure.

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1.3.4. Financial Autonomy: The central bank’s financial resources available to fulfill its
mandate, and the nature of those resources, are clearly disclosed. In this respect,
there is clarity regarding the central bank’s capital, the rules governing any
recapitalization of the central bank, its budget, reserves, provisions, profit
distribution mechanism, monetary financing, and applicable accounting standards.
1.4. Decision-Making Arrangement: The central bank discloses a clear overview of theorganizational structure or allocation of responsibilities to its decision-making bodies: policy making,day-to-day management, and internal oversight of the central bank.
Selected principles from BCP, ICP, IOSCO, KA, and PFMI (see Annex).

1.5. Risk Management: The central bank discloses the principal risks that it needs to take to meet its
objectives (such as financial, operational, and legal risks), and the framework to manage these risks.
This includes information on the risk governance structure and risk strategy.
1.5.1. Risk Exposure: The central bank discloses the principal risks that it needs to take tomeet its objectives.
1.5.2. Risk Framework: The central bank discloses the process for identifying financial andnonfinancial risks, the overall risk strategy, and the accompanying risk governancestructure designed to monitor and evaluate risks effectively.
1.6. Accountability Framework: The central bank discloses its accountability framework thatprovides transparency and reporting mechanisms to internal decision-making bodies, politicalinstitutions, and the general public.
1.6.1. Arrangements: Accountability arrangements are clearly identified, including (i)internal and external audit arrangements and compliance; (ii) reporting to an audit
committee or Board having an oversight responsibility; and (iii) the external
publication of audited financial statements and annual reports.
1.6.2. Tools:
Independently Audited Financial Statements: The central bank discloses its
auditing and accounting standards and compliance frameworks and gives the public
sufficient information to assess and understand the central bank’s financial
performance, use of resources, and transactions with the government and otherstakeholders.
Internal Audit: The central bank provides the public with information regarding its
internal audit function, discloses its framework and compliance with the framework,and the scope of its responsibilities.
Audit Committee: It is clear whether an internal oversight body that reports to theBoard exists, and which of the activities are published.
1.6.3. Anti-corruption Measures and Internal Code of Conduct: It is clear whether
domestic anti-corruption legislation and measures apply to the decision-makers,
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staff, and agents of the central bank. The central bank discloses its internal Code of
Conduct with additional requirements specific to central bank management andstaff.
1.6.4. Human Capital Management: The central bank discloses its policies and practices
concerning the governance and management of human capital.
1.7.
Communication: The central bank discloses means and methods of communication and theforms of disclosure of information to its stakeholders.
1.7.1. Arrangement: The central bank discloses the organizational structure,
responsibilities, and processes relevant for communication.
1.7.2. Strategy/Tools: The central bank discloses the objectives, target audiences,channels, and tools of communication policy.
1.8. Confidentiality: The central bank discloses its policy on confidentiality or secrecy of central bankinformation, including the reasons underlying the choices it has made on disclosure or non-disclosureof sensitive information.
Selected principles from BCP, ICP, IOSCO, KA, and PFMI (see Annex).
Pillar II—Central Bank Policies
2.1 Monetary Policy: The central bank publicly and clearly discloses the objectives, policy framework,
and instruments of monetary policy.
2.1.1. Objectives and Framework: The central bank discloses its monetary policy
framework and strategy for achieving its objectives.
2.1.2. Policy Decisions: The central bank discloses its monetary policy decisions in a timely
manner and indicates how the decisions foster the achievement of its monetary
policy objective(s). The central bank discloses the process by which policy decisions
are taken, including with respect to the meeting calendar of its monetary policy
decision-making bodies and their voting procedures.
2.1.3. Supporting Analysis: The central bank discloses relevant economic information andsupporting analysis that informs its monetary policy decisions.
2.2. Cross-Border Financial Flows and Foreign Exchange Administration: The central bank isclear about its role in determining and implementing the policy on cross-border financial flows andforeign exchange administration. It discloses the objective(s), the legal and institutional frameworks it
is acting under, its policy decisions, as well as the process by which policy decisions are taken.
2.2.1.

Objectives and Framework: The central bank discloses the policy’s objective(s),legal and institutional frameworks, and the strategy to achieve the policy objectives.
There is clarity whether the central bank can delegate some of its functions to
implement policy decisions to other entities and on the modalities of suchdelegation.

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2.2.2.

Policy Decisions: Policy decisions, whether on new actions or changes to standing
policy or other changes in the regulatory framework, are publicly announced,
explained, and disclosed in a timely manner. The central bank is clear about theprocess by which policy decisions are taken.

2.2.3.

Supporting Analysis: The central bank discloses in a timely manner the supporting
analysis, including the intended outcome that informs its policy decisions.

2.3. Foreign Exchange Management: The central bank clearly and publicly discloses its foreignexchange policy objectives, including the hierarchy of objectives and the operational framework andinstruments of foreign exchange interventions.
2.3.1. Objectives and Framework: The central bank discloses its policy objectives andlegal, operational, and institutional frameworks, consistent with the chosen foreignexchange regime.
2.3.2. Policy Decisions: The central bank discloses its decision-making process, including
the rationale for foreign exchange management instruments, and the means andmethods of reaching a decision. The potential impact of its policy decisions is
explained in a timely manner.
2.3.3. Supporting Analysis: The central bank discloses its assumptions, transmission
channels, and analysis backing the intervention policy decisions, as well as ex-post
evaluation of economic impact.
2.4. Foreign Exchange Reserve Management: The central bank discloses its policy objectives forforeign exchange reserve management, along with key considerations behind the policy, details on
how oversight responsibility is allocated, and the potential impact of the policy.
2.4.1. Objectives and Framework: The central bank discloses broad investment objectives,operative models, how it allocates oversight responsibility, and the institutionalframework of its policy decisions.
2.4.2. Policy Decisions: The central bank discloses key elements of policy formulation,
related risk exposures, instruments, decision-making hierarchy, and the oversightallocation process.
2.4.3. Supporting Analysis: The central bank discloses the key assumptions andassessment process related to its policy decisions.
2.5. Macroprudential: The objectives, decision-making process, and instruments of macroprudential
policy are clearly communicated to the public. Indicators and supporting analysis to assess the need for
macroprudential measures are disclosed alongside policy decisions.
2.5.1. Objectives and Framework: The central bank discloses its macroprudential policy
framework, including its objectives, instruments, and strategy for achieving its
objectives.

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2.5.2. Policy Decisions: The central bank publicly announces its macroprudential policy
decisions in a timely manner, and discloses the decision-making process leading up
to macroprudential action.
2.5.3. Supporting Analysis: The central bank discloses the key indicators and analyses
used to assess the need for macroprudential measures. It explains the rationale andthe expected transmission channels of policy instruments in achieving theirobjectives.
2.6. Microprudential Supervision: Selected principles from BCP, ICP, and IOSCO (see Annex).

2.7. Emergency Liquidity Assistance: The central bank discloses the scope and objectives of
emergency liquidity assistance, while maintaining the necessary confidentiality, to preserve financial
stability and in support of monetary policy and its implementation.

2.8. Resolution: Selected principles from KA (see Annex).

2.9. Financial Market Infrastructures: Selected principles from PFMI (see Annex).

2.10. Financial Integrity: The central bank discloses its policies and powers for Anti-Money
Laundering/Countering the Financing of Terrorism supervision, and a description of its internal control
framework relating to the activities or services that may give rise to Money Laundering/Terrorist
Financing risk.

2.11. Consumer Protection: The central bank discloses its policies relating to consumer protection,
conducted solely or jointly with other agencies.
Pillar III—Central Bank Operations
3.1. Monetary Policy: The central bank discloses its operational framework with aoperational target, objectives, instruments, collateral, and access criteria.

well-defined

3.1.1. Instruments: The central bank discloses its monetary policy instruments.
3.1.2. Coverage: The central bank discloses: (i) the type of instrument (open market
operations, standing facilities, other facilities, reserve requirements, and direct
instruments of monetary control); (ii) the characteristics of each instrument; and (iii)the collateral framework.
3.1.3. Access: The central bank discloses the monetary policy counterparties’ framework.
3.2. Cross-Border Financial Flows and Foreign Exchange Administration: The central bankdiscloses how it implements this policy in terms of the instruments and the scope of its operations andactions.
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3.2.1. Instruments: The central bank’s instruments for implementing the policy and thecircumstances in which they can be used are clearly defined and disclosed.
3.2.2. Coverage: The central bank discloses information about the persons (entities andindividuals), transactions, and other aspects of the foreign exchange system that it
can and does regulate; persons, transactions, and activities that it can license,
approve, monitor, and sanction; and foreign exchange transactions that it canperform.
3.3. Foreign Exchange Management: The central bank discloses how it implements its foreignexchange policies framework in terms of instruments, markets, size, and mode of access.
3.3.1. Instruments: The central bank discloses the set of instruments used for foreignexchange management policy, key considerations under which these instruments arechosen, and eligibility criteria of counterparties and mode of access.
3.3.2. Coverage: The central bank discloses the markets and agents who are targeted by
the foreign exchange management policy.
3.4. Foreign Exchange Reserve Management: The central bank discloses the general principles
governing its foreign exchange reserve management operations, including relationships withcounterparties and service providers.
3.4.1. Instruments: The central bank discloses the broad selection criteria for eligible asset
classes, composition of instruments, investment horizon and constraints.
3.4.2. Coverage: The central bank discloses the criteria to select eligible market
counterparties and service providers and eligible markets to conduct its operations.
3.4.3. Assessment: The central bank discloses criteria to assess adequacy and liquidity
parameters and discloses such analysis regularly, at predetermined times.
3.5. Financial Stability Assessments and Stress Testing: The central bank periodically discloses its
assessment of domestic financial stability to the public and is transparent about the methods used forsuch assessments, including its framework for stress testing.
3.5.1. Financial Stability Assessments: The central bank periodically provides to the
public its assessment of risk to financial stability, including new and emerging
sources of vulnerability.
3.5.2. Macroprudential Stress Testing Methods: The central bank discloses the methods
and key assumptions of the stress testing framework.
3.5.3. Stress Testing Coverage: The central bank discloses the coverage of the stresstesting exercise.
3.5.4. Central Bank Use of Stress Test Results: There is clarity about the ways the central
bank uses the stress test results.

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3.6. Macroprudential Policy Implementation: The central bank discloses how it implements
macroprudential policies, including the design of policy instruments and enforcement arrangements.
3.6.1. Instruments: The central bank discloses the precise design and objectives of its
macroprudential instruments, including the scope of entities and financial
instruments subject to macroprudential constraints.
3.6.2. Enforcement: The central bank discloses enforcement mechanisms andresponsibilities for all entities and financial instruments subject to macroprudential
constraints.
3.7. Microprudential Supervision: Selected principles from BCP, ICP, and IOSCO (see Annex).

3.8. Emergency Liquidity Assistance: The central bank may disclose any ongoing provision of
emergency liquidity assistance (including bilateral and market-wide support) and its conditions andparameters once the need for confidentiality has ceased.

3.9. Resolution: Selected principles from KA (see Annex).

3.10. Financial Market Infrastructures: Selected principles from PFMI (see Annex).

3.11. Financial Integrity: The central bank discloses its Anti-Money Laundering/Countering the
Financing of Terrorism supervisory processes as well as details about resources allocated to its internal
Anti-Money Laundering/Countering the Financing of Terrorism controls.

3.12. Consumer Protection: The central bank discloses its operations relating to consumer protection
conducted solely or jointly with other agencies.
Pillar IV—Central Bank Outcome
4.1 Monetary Policy: The central bank is transparent about the outcome of its monetary policy
conduct.
4.1.1. Governance Actions: The accountability of the central bank on monetary policy isclear as to whom accountability is owed and how it is discharged.
4.1.2. Policies: The central bank discloses progress toward achieving its monetary policy
objective(s) as well as prospects for achieving them.
4.1.3. Operations: The central bank discloses the volumes and interest rates of theoperations, as well as the level of the operational target achieved.
4.2. Cross-Border Financial Flows and Foreign Exchange Administration: The central bankdiscloses the outcome of its policy implementation.

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4.2.1. Governance Actions: The central bank discloses information about to whom its
accountability on the policy is owed and how it is discharged.
4.2.2. Policies: The central bank discloses on a regular basis information about the resultsin achieving the policy objectives.
4.2.3. Implementation: The central bank discloses on a regular basis information about
the results of the policy implementation.
4.3. Foreign Exchange Management: The central bank discloses how its governing committee isaccountable for undertaking and reporting on foreign exchange interventions.
4.3.1. Governance Actions: The central bank discloses its decision-making structure andhow it is accountable for Foreign Exchange Management.
4.3.2. Policies: The central bank discloses the role of Foreign Exchange Management
toward achieving its policy objective(s) as well as its interaction with broader
monetary policy objectives.
4.3.3. Operations: The central bank discloses the results of its market operations, thevolume of activity, and the direction of interventions on its website at a predefinedtime lag.
4.4. Foreign Exchange Reserve Management: The central bank discloses any changes to the generalprinciples of internal governance and provides clarity on the outcomes of its policy decisions about
foreign exchange reserve management.
4.4.1. Governance Actions: The central bank publicly discloses the general principles ofinternal governance to ensure the integrity of its policy formulation and operations.
4.4.2. Reporting on Implementation: The central bank discloses data relating to the level
and composition of reserve assets, short-term liabilities, and drains that can lead todemand on reserves at a predefined frequency.
4.4.3. Financial Results: There is clarity in audited financial statements on the amount,composition, profit/loss, and risks arising from foreign exchange reserves.
4.5. Macroprudential Policy: The central bank discloses outcomes and evaluations of its
macroprudential policy actions and its accountability for such actions.
4.5.1. Governance Actions: The accountability of the central bank on macroprudential
policies is clear as to whom accountability is owed and how it is discharged.
4.5.2. Policies: The central bank discloses ex-post evaluations of its macroprudential
policies.
4.6. Microprudential Supervision: Selected principles from BCP, ICP, and IOSCO (see Annex).

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4.7. Emergency Liquidity Assistance: The Emergency Liquidity Assistance framework allows forappropriate disclosure of the provision of liquidity support, terms and conditions, and amounts
provided, while maintaining confidentiality as long as required.

4.8. Resolution: Selected principles from KA (see Annex).

4.9. Financial Market Infrastructures: Selected principles from PFMI (see Annex).

4.10. Financial Integrity: The central bank discloses the outcome of its Anti-Money
Laundering/Countering the Financing of Terrorism supervisory actions as well as details about theoversight of its internal Anti-Money Laundering/Countering the Financing of Terrorism controls.

4.11. Consumer Protection: There is clarity about the results and implications of consumer
protection policies and operations conducted solely or jointly with other agencies.
Pillar V—Central Bank Official Relations
5.1. Government: The central bank discloses its relationship with the government. This includes theexchange of information, the coordination of policies, and financial aspects such as rules on profit
distribution, clearly distinguishing the different roles and modalities this can take.
Selected principles from: BCP, ICP, IOSCO, KA, and PFMI (see Annex).
5.1.1. The institutional relationship between the central bank and the government/its
agencies is clearly defined and publicly disclosed.
5.1.2. The central bank publicly discloses its policies and terms and conditions governing
financial transactions with the government, including its fiscal agent role, themanagement of the current account, deposit taking, advances, guarantees, loans andcredit arrangements to the public sector, as well as agency services performed onbehalf of the government.
5.1.3. The instruments used in interaction (including the financial transactions) between
the central bank and the government/its agencies are clearly defined and publicly
disclosed.
5.1.4. The central bank discloses publicly on a regular basis the outcome of its interaction(including operations) with the government/its agencies.

5.2. Domestic Financial Agencies: The central bank discloses its relationships with domestic financial
agencies as relevant to the pursuit of its mandate and the execution of its functions.
Selected principles from BCP, ICP, IOSCO, KA, and PFMI (see Annex).

18 INTERNATIONAL MONETARY FUND

THE CENTRAL BANK TRANSPARENCY CODE

5.2.1. The relationship between the central bank and relevant domestic financial agencies is clearly
defined and publicly disclosed, including cooperation and (co-) decision-making modalities andarrangements for the formal/informal sharing of information.
5.2.2. The policies and instruments used in the interaction of the central bank withdomestic financial agencies, and the outcome of the interaction are transparent.
5.2.3. With respect to macroprudential policy, the central bank discloses its role,
responsibly, and actions—and those of any other authority it collaborates with. The
central bank also discloses any advice it receives.
5.2.4. With respect to financial stability, all arrangements to restore or maintain financial
stability are clearly disclosed, including arrangements on data sharing, liquidity
support, and who is responsible for which type of decision or action at what stage.
5.3. Foreign Agencies: The central bank discloses its dealings with international organizations foreign
governments, other central banks, and other relevant foreign agencies, including the nature of theinvolvement or interactions, and any obligations and commitments that may arise from these
relationships.
Selected principles from BCP, ICP, IOSCO, KA, and PFMI (see Annex).
5.3.1. The relationship for the exchange of information and coordination of actions andpolicies between the central bank and international organizations, foreign
governments, other central banks, and other relevant foreign agencies is clearly
defined and publicly disclosed.
5.3.2. The central bank publicly discloses its policies, terms, and conditions governinginteraction with international organizations, foreign governments, other central
banks, and other relevant foreign agencies.
5.3.3. The instruments used in the interaction (including financial transactions) between
the central bank and international organizations, foreign governments, other central
banks, and other relevant foreign agencies are clearly defined and publicly disclosed.
5.3.4. The central bank discloses publicly on a regular basis the outcome of its relationshipwith international organizations, foreign governments, other central banks, andother relevant foreign agencies.
5.4. Other Relations: The central bank discloses its involvement with private or semi-public
institutions.
Selected principles from BCP, ICP, IOSCO, KA, and PFMI (see Annex).
5.4.1. The central bank discloses its investments in and ownership of subsidiaries and joint
ventures with private, semi-public, or public entities.

INTERNATIONAL MONETARY FUND 19

No.
0

PRINCIPLE
General Principle on Central Bank Transparency: To strengthen their accountability, and as a prerequisite for their autonomy, whilst taking
legitimate needs for confidentiality into account, central banks disclose their governance, policies, operations, and outcome of thosepolicies and operations, as well as the official relations they maintain with government, domestic and international agencies, and otherinstitutions.

No.
1

DIMENSION

1.1.

Legal Structure

CORE

EXPANDEDCOMPREHENSIVEPILLAR I—GOVERNANCE(a) Legal Framework

5

PRINCIPLE

The central bank discloses its legal framework to the public in a manner that is clear and easily accessible.
In addition to core
The legal framework
The central bankpractices:
governing the central bank, discloses a broad
The central bank discloses
its legal nature, and its legal description of its legal
to the public specific andprotection are disclosed inframework, its legal
detailed informationa manner that is clear andnature, and its legal
describing its legal
easily accessible.
protection.
framework, its legal
nature, and its legal
protection.
The legal framework
The central bankIn addition to core
In addition to expanded
governing the central bankdiscloses: (i) an updated
practices:
practices:
is disclosed.
and consolidated central The legal framework
The central bankbank law; and (ii) a broad which the central bankcommunicates anddescription of (a) its legal adopts with respect of
discloses in advance if andframework; (b) its
financial institutions iswhen it plans to review its
objectives, functions, and disclosed.
framework, and also how
powers; and (c) theit will engage withSee Glossary. Unless noted otherwise, “disclosure” refers to “publicly available and easily accessible.”

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20 INTERNATIONAL MONETARY FUND

A. DESCRIPTION OF CORE, EXPANDED, AND COMPREHENSIVE PRACTICES BY PRINCIPLE5No.

DIMENSION

PRINCIPLE

CORE
source of its objectives,
functions, and powers.

EXPANDED

The legal framework
disclosed by the central
bank is clear on which
law prevails in the eventthat the provisions of thecentral bank law conflictwith those of other laws.

(b) Legal Nature

Insofar as the central
bank has private
shareholders, the central
bank clearly discloses thedecision-making powers

The central bank discloses
specific information on its
legal framework.

In addition to corepractices:
The central bank’s
Articles of
Association/Statute/ByLaws (if any) and theRules of Procedure
governing its decisionmaking bodies (if any)
are disclosed.

In addition to expanded
practices:
The central bank discloses
specific information on its
legal nature, its
ownership, its general
legal capacity to act, andits legal instruments.
Details on the central
bank’s legal instruments
are Disclosed.

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INTERNATIONAL MONETARY FUND 21

The ownership and legal
nature (e.g., establishedpursuant to company law;
corporation of public law,
sui generis institution) of
the central bank aredisclosed. This includes its
general legal capacity to: (i)enter into contracts; (ii)institute legal proceedings
and be subject to suchproceedings; and (iii)
acquire, administer, holdand dispose of movableand immovable property.

The central bank law
disclosed by the central
bank clearly defines any
transitionalarrangements which are
limited in time.
The central bankdiscloses the central
bank law which
establishes (i) its legal
nature; (ii) its ownership;(iii) its general legal
capacity to act; and (iv)
its legal instruments.

COMPREHENSIVE
stakeholders for possible
input.

DIMENSION

PRINCIPLE
The legal instruments that

COREof the general meetingof shareholders.

EXPANDEDCOMPREHENSIVE

are available to a central
bank, i.e., non-binding
instruments(recommendations), andlegally binding instruments,
irrespective whether they
are generally applicable orare addressed to specificlegal, or natural persons are(c) Legal Protection

disclosed.
The central bank’s legal
protection is disclosed.
Note that this is linked tothe disclosure of the legal
protection for central bankofficials and staff members(see section 1.3.3. on
personal autonomy).

The central bankdiscloses the central
bank law which
establishes the extent of
judicial review over its
activities.

In addition to corepractices:
The central bank discloses
specific information on its
legal protection.

The central bankdiscloses the central
bank law which clarifies
whether the central bankis protected from pre-1.2.

judgment attachments.
Selected principles from BCP, ICP, IOSCO, KA, and PFMI (see Annex).
Mandate
The central bank discloses its mandate—including its objectives, functions, and legally defined powers—in a manner thatis clear and easily accessible to the public.
The central bank has a clear The mandate of the
In addition to core
In addition to expanded
mandate—articulated in a set central bank and its
practices:
practices:

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22 INTERNATIONAL MONETARY FUND

No.

No.

DIMENSION

PRINCIPLE
of objectives, functions, andlegal powers—that enable it
to carry out its objective(s).

COREmission statement are
disclosed.

The central bank’s mission
statement is consistent with
its stated mandate.
The central bank’s mission
statement is disclosed.

(a) Objectives

The central bank discloses its
objectives.

The objectives of thecentral bank aredisclosed.

EXPANDED
The central bankdiscloses specificinformation on the legal
provisions regarding its
mandate.
The specific functions
and legal powers behindeach central bankobjective, which can varyby institution, are clearly
defined.
In addition to corepractices:
The central bankdiscloses the legal
foundation of its
objectives.

In addition to expanded
practices:Insofar as the degree ofcentral bank autonomy
varies with respect to its
different objectives, suchvariance is defined anddisclosed.
The central bank discloses
details of its quantified
objectives (if any).
The central bank discloses
any other relevant
information on its(b) Functions

The central bank discloses its

The central bank discloses

functions.

a list of its activities (i.e.,

In addition to corepractices:

objectives.
In addition to expanded
practices:

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When the central bankhas multiple objectives,the central bankdiscloses the mechanism
for determining which
objective prevails.

COMPREHENSIVE
Insofar as the degree ofcentral bank autonomy
varies with respect to its
different objectives, suchvariance is disclosed.

DIMENSION(c) Powers

PRINCIPLE

CORE

EXPANDEDCOMPREHENSIVE

functions) and indicates

The central bank

The central bank discloses

how these are consistent

discloses the legal

any other relevantwith its objectives.

foundation of its

information on its

functions.
In addition to corepractices:
Prohibitions which preventthe central bank fromconducting specificactivities are disclosed.

functions.
In addition to expanded
practices:Insofar as the central bankhas any general incidental
or ancillary powers thescope thereof is clearly
explained and disclosed.

The central bank discloses its

The central bank discloses

powers.

a list of its public andprivate law powers, anddetails how these powers
help it carry out its
functions to achieve its
objectives.

The central bank discloses
specific information its
powers, as well as

1.3.

6

prohibited activities.
Selected principles from BCP, ICP, IOSCO, KA, and PFMI (see Annex).
Autonomy
The central bank discloses its autonomy—as defined in relevant legislation or regulations, allowing it to reveal towhat extent it is autonomous or not, in what forms, and under which conditions—in a manner that is clear andeasily accessible to the public.
1.3.1. Institutional/
In addition to expanded
Whether the central bank is The central bank clarifies In addition to core
Operational6
whetheritandthepractices:
practices:prohibited to seek or takemembersof
its
decisionThecentralbank
The central bank discloses
instructions from any
making bodies arediscloses ifwhat its
private or public body is
prohibited from seeking
representatives of third
institutional/operational
disclosed. The extent toor taking instructions
parties (i) can attend
autonomy consists of,which its autonomy varies
from any public or
central bank decisionhow this is implemented
with respect to various
governmental authorities making bodies; and (ii), if in practice, and what it

Used interchangeably in this Code.

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24 INTERNATIONAL MONETARY FUND

No.

No.

DIMENSION

PRINCIPLE
elements of its mandate isdisclosed. Where
appropriate, the central
bank clarifies whether thecentral bank has goal or

CORE(including ministries andsupervisory agencies)
and from any other(including commercial)
body.

instrument autonomy withrespect to its various
objectives.

1.3.2.

Personal

There is clarity on whether
the central bank is able toperform its duties without
prior approval from thegovernment.

It is clear whether membersof the central bank’s
decision-making bodies
have security of tenure. The

The central bankdiscloses whether third
parties are prohibited toapprove, suspend, annul,
or defer central bankdecisions.
The central bank clarifies
how its monetary policy
goal is determined (i.e.,
whether it has goal
autonomy) and whether
it is autonomous inexercising such goal (i.e.,
whether it has
instrument autonomy).
The central bankdiscloses the duration of
the term of office formembers of its

The central bankdiscloses the role andscope of audits
conducted by state audit
bodies, if and where
relevant.
In addition to corepractices:
The central bankdiscloses and provides
detailed information on
any arrangements
regarding the role ofthird parties to approve,suspend, annul, or defer

COMPREHENSIVE
sees as the rationale forthis autonomy.

In addition to expanded
practices:
The central bank discloses
what its functional
autonomy consists of,
how this is implemented
in practice, and what itsees as the rationale forthis autonomy.

its decisions.

In addition to corepractices:
The central bankdiscloses the regulations

In addition to expanded
practices:
The central bankdiscloses what its personal

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INTERNATIONAL MONETARY FUND 25

1.3.3.

Functional

EXPANDED
so, are excluded fromvoting whenparticipating in central
bank decision-making
bodies.

DIMENSION

1.3.4.

Financial

PRINCIPLE
central bank discloses thenature of such security, andthe fit and proper
requirements.

The central bank’s financial
resources available to fulfill
its mandate, and the natureof those resources, aredisclosed. This includes thecentral bank’s capital,budget, reserves,
provisions, profit
distribution mechanism,
monetary financing, andapplicable accounting
standards.

CORE
decision-making bodies,
as well as the criteria andprocedures for theappointment anddismissal of such officials.
Specifically, the central
bank discloses whichauthorities are involvedin the appointment anddismissal of members of
its
decision-making bodies,
the eligibility andincompatibility
requirements, and thegrounds and proceduresfor dismissal.
The central bankdiscloses and clarifies
general arrangements
regarding the central
bank’s capital, budget,
reserves, provisions,profit distribution
mechanism, monetaryfinancing, and applicableaccounting standards.

EXPANDED
governing renumerationof members of its
decision-making bodies
as well as any detailed
arrangements for its
determination.

COMPREHENSIVE
autonomy consists of,
how this is implemented
in practice, and what itsees as the rationale forthis autonomy.

The central bankdiscloses and clarifies
whether the central bank,members of its decisionmaking bodies, andemployees can be liablefor damages caused byany of their acts oromissions.

In addition to corepractices:
The central bankdiscloses its regulations
anddecision-making procedures for (i)the determination of its
budget; (ii) the creationof provisions, including
general and special
reserves; (iii) the
accounting treatment offoreign exchange gains

In addition to expanded
practices:
The central bank discloses
what its financial
autonomy consists of,
how this is implemented
in practice, and what itsees as the rationale forthis autonomy.

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26 INTERNATIONAL MONETARY FUND

No.

No.

DIMENSION

PRINCIPLE

CORE

EXPANDEDCOMPREHENSIVE

and losses; (iv) the rules
on distribution ofdividends to thegovernment; and (v) the
provisions for central
bank recapitalization.
1.4.

Selected principles from BCP, ICP, IOSCO, KA, and PFMI (see Annex).
Decision-making
The central bank discloses a clear overview of the organizational structure or allocation of responsibilities to its
Arrangement
decision-making bodies: policy making, day-to-day management, and internal oversight of the central bank.
In addition to expanded
The central bank discloses a The central bank clarifies In addition to corepractices:
practices:
clear overview of theits organizational
The central bank
The central bank discloses
organizational structure or
structure by means ofallocation of responsibilities

disclosing the functions

to itsof itsdecision-making

decision-making bodies, and links(b) day-to-day

to relevant central bankmanagement; or (c) internal

legislation or

oversight of the central

charters/by-laws.

bank. This can include

The central bank alsobodies with designations

discloses aspects relatingsuch as Board, Council,

to the composition of its

Court, Committee, if anddecision-making bodies,

where applicable.

and the allocation of
responsibilities acrossdifferent decisionmaking bodies.

easily accessible details

information on the(e.g., CVs/biographies) oforganization of it

the members of its

functions (where

decision-making bodies,applicable), including

and that these are kept up

detailed organization

to date.

charts of those functions,as well as additional
details on how decisionmaking bodies operate(e.g., voting
arrangements, frequencyof meetings, and how
dissent is dealt with). The
central bank discloses
which decision-making
body is responsible for

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INTERNATIONAL MONETARY FUND 27

bodies: (a) policy making;discloses detailed

DIMENSION

PRINCIPLE

CORE

EXPANDEDCOMPREHENSIVE

general and forindividual regulatory
decisions.

1.5.

Selected principles from BCP, ICP, IOSCO, KA, and PFMI (see Annex).
Risk Management
The central bank discloses the principal risks that it needs to take to meet its objectives (such as financial,
operational, and legal risks), and the framework to manage these risks. This includes information on the risk
governance structure and risk strategy.
The central bank’s annual
The central bank discloses
report and annual
the principal risks (such as
financial statements
financial, operational, andprovide a high-level
legal risks) that it needs tooverview of, and limited
take to meet its objectives,disclosures on, key risks,
and the framework tosuch as financial,manage these risks. This
operational, and legal
includes information on the risks. A brief descriptionof risk management
risk governance structure
process and governanceand risk strategy.
structure is also
provided.

In addition to corepractices:
The central bank’s annual
report contains a riskstatement limited tocertain types of risks or
specific operations, anddescribes some risk
strategies, such as
collateralization andlimits.

In addition to expanded
practices:
The annual reportprovides a mapping of
key risks to the central
bank’s mandate, and an
explicit risk statement.
Information on risk
strategies iscomprehensive andresponsibilities along therisk management process
are further detailed in

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No.

No.

DIMENSION

1.5.1.

Risk Exposure

PRINCIPLE

CORE

EXPANDED
The central bank legal
framework explicitly
allocates responsibility
for risk oversight and risk
management among its
decision-making bodies.

The central bank discloses

The central bank’s annual
report provides a highlevel overview of key
risks.

In addition to corepractices:
The central bank’s annual
report provides a highlevel overview ofdevelopments in key
risks.

the principal risks that itneeds to take to meet its
objectives.

INTERNATIONAL MONETARY FUND 29

The central bank’s annual
report contains a riskstatement limited tocertain types of risks or
specific operations (e.g.,
investments).
The central bank’s annual
report and annual
financial statements
disclose the level of anddevelopments in the

The central bank’s annual
report contains a riskstatement outlining its
stance on financial,
operational, and otherrisks from its policy
operations, investment
operations, and other

THE CENTRAL BANK TRANSPARENCY CODE

The central bank’s annual
report and annual
financial statements
contain limited
disclosures on risks.

COMPREHENSIVE
published regulations.
Risk disclosures, including
in annual financial
statements, encompass
quantified demands onthe central bank’s
financial resources andbuffers, and high-leveldescription ofquantification
methodologies.
In addition to expanded
practices:
The central bank’s annual
report provides a highlevel overview of key risks
mapped to its mandate,
and the role of risk
management in pursuit of
its objectives. The annual
report also includes asection on developments
in key risks.

DIMENSION

1.5.2.

Risk
Framework

PRINCIPLE

The central bank discloses
the process for identifying
financial and nonfinancial
risks, the overall risk
strategy, and theaccompanying risk
governance structure
designed to monitor andevaluate risks effectively.

CORE

The central bank’s annual
report provides an
overview of risk
governancearrangements (e.g.,committees, dedicatedunits) and of the risk
management process.

EXPANDED
central bank’s risks
exposures.

In addition to corepractices:
The central bank’s legal
framework allocates
responsibility for risk
oversight and risk
management among thecentral bank’s decisionmaking bodies.
The central bank’s annual
report includes a
description of theprocess of continuous

COMPREHENSIVE
activities (e.g., currency
management, banking,and payment systems).
The central bank’s annual
report and annual
financial statements
disclose the level of (anddevelopments in) its risks
exposures, as well as
associated quantified
demands on its financial
resources/buffers,
including a brief
description of themethodology used forquantification.
In addition to expanded
practices:
The responsibilities forrisk oversight and risk
management are
disclosed further incentral bank’s publishedinternal regulations.
The central bank’s
published internal
regulations define theroles of organizational
units and committees in

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No.

No.

DIMENSION

PRINCIPLE

CORE

EXPANDED
identification, evaluation,and mitigation of risks.

COMPREHENSIVE
the risk management
process.

The annual report
describes one or morerisk strategies, such as
collateralization oflending activities andlimits in investment
operations.

The central bank’s annual
report includes references
to applicable standards
and frameworks, including
a high-level description of
methodologies forquantifying risks.

The annual report also
highlights any
developments in central
bank’s risk framework.

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The annual report
describes risk strategies,
such as acceptance ortransfer of some risks andmitigation of others, i.e.,collateralization oflending in policy
operations, risk limits ininvestment operations,plans for business
continuity and recovery,
awareness programs on
cyber security, and tools
and internal controls for
managing operationalrisks.

DIMENSION

PRINCIPLE

CORE

EXPANDEDCOMPREHENSIVE
The annual report also
gives a high-level
overview of the central
bank’s policies andarrangements for times ofcrisis.

1.6.

Accountability
Framework

The central bank discloses its accountability framework that provides transparency and reporting mechanisms tointernal decision-making bodies, political institutions, and the general public.
The central bank discloses
In addition to core
Accountability
its accountability
practices:arrangements andframework that provides
Accountability
related reporting tools
transparency and reporting
arrangements andgoverning (i)mechanisms to internal
related tools utilizing
independently audited
decision-making bodies
recognized accounting
financialstatements;(ii)(e.g., Board/Council orand auditing standards
internal audits; and (iii)
relevant committees),and reporting practices
audit committee arepolitical institutions (e.g.,(such as timely
government, parliament),
publication within thedisclosed. Informationand the general public.
statutory deadline).
about the central bank’s
code of conduct andhuman capitalmanagement are also
accessible.

Disclosure of the scopeof application of thecode of conduct and an
accountability
mechanism for humancapital management.

In addition to expanded
practices:
Accountability
arrangements containing
clear and detailed
provisions to ensure
independent audits andhigh-quality financial
reporting. In addition to
the audited financial
statements, the annual
report includes acomprehensive discussion
on the activities of thecentral bank. A report of
the audit committee ispublished.
The central bank’s website
discloses the scope of
application of the code of
conduct and how the

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No.

No.

DIMENSION

PRINCIPLE

CORE

EXPANDEDCOMPREHENSIVE
staffing rules areincorporated into the1.6.1.

Arrangements

In addition to expanded
practices on preparationand publication of annual
financial statements andan annual report, the legal
framework also contains

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central bank’s strategy.
Accountability arrangements are clearly identified, including (i) internal and external audit arrangements andcompliance; (ii) reporting to an audit committee or Board having an oversight responsibility; and (iii) the external
publication of audited financial statements and annual reports.
Independently Audited
The legal framework
The legal framework
The legal framework
Financial Statements:
contains provisions forcontains provisions forcontains provisions toan external audit of thean external audit by anensure audit quality andannual financial
independent audit firm in independence. Provisions
statements. It contains
accordance withinclude (i) an external
provisions on theinternational standards. It audit to be carried out by
publication of thecontains provisions for
an independent firm ofaudited annual financial
the: (i) preparation ofgood repute withstatements and annual
audited annual financial
international experience;
report.
statements and the(ii) an audit conducted inapplicable accounting
accordance with
The central bankstandards; and (ii)international standards;
discloses whether thedeadline for the(iii) an appointing
annual financial
publication of an annual
authority (multi-year
statements are published report.
appointments and audit
separately or within thefirm rotation periods); andannual report.
(iv) oversight ofperformance by an audit
committee.

DIMENSION

1.6.2.

Tools

PRINCIPLE

CORE

EXPANDEDCOMPREHENSIVE
provisions on thefrequency of the
publication (e.g.,
weekly/monthly) of thebalance sheet.
Internal Audit:
The central bank clearly
In addition to core
In addition to expanded
establishes the roles andpractices:
practices:duties of an internal
Dual reporting lines to
The appointment andaudit function.
both senior management dismissal, terms, andand the audit committee eligibility criteria for theor central bank board are head of the internal audit
established.
function are explicit.
Audit Committee:
The legal framework
In addition to core
In addition to expanded
contains provisions onpractices:
practices:
assigning responsibility
A mechanism for
The central bank discloses
to the Board (or its audit
reporting is clearly
the rules governing thecommittee) to oversee
established.
reporting by the audit
matters on internal andcommittee (or anotherexternal audit andbody), and for publication
compliance.
in theannual report.
Independently Audited Financial Statements: The central bank discloses its auditing and accounting standards andcompliance frameworks and provides the public with sufficient information to assess and understand its financial
performance, use of resources, and transactions with the government and other stakeholders.
Annual financial
In addition to core
In addition to expanded
statements are preparedpractices:
practices:in accordance with a
Publication of the annual The annual reportrobust and widely
financial statements is
includes a complete set ofrecognized accounting
within the statutory
audited financial
framework. An external
deadline.
statements (which can
audit opinion
also be separately
accompanies the
published) and a

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DIMENSION

PRINCIPLE

CORE
published financial
statements.

EXPANDED
The central bank releases
an audit opinion
accompanying thefinancial statements andmeets the statutory
deadlines for publication.

INTERNATIONAL MONETARY FUND 35

Internal Audit: The central bank provides the public with information regarding its internal audit function,
discloses its framework and compliance with it, and the scope of its responsibilities.
The published annual
In addition to core
In addition to expanded
report or the central
practices:
practices:
bank’s website contain a
The published annual
The published annual
basic description of thereport or the central
report or the central
internal audit function
bank’s website clarify the bank’s website also
and the conformance ofrules governing theclarifies the rules
its activities with its
independence of thegoverning the internalinternal audit function
audit function and

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Additional general
information on
performance, use ofresources (including
those used for non-core
activities such as lending
to the public sector andother quasi-fiscal
activities, if any), andrelationship with thegovernment (see also
Pillar V) is publicly
available to stakeholders(e.g., in the annual
report).

COMPREHENSIVE
comprehensive discussion
on the activities of thecentral bank. This includes
information on significant
transactions andhighlights for the period.
This information should
be clear and enable a user
to assess performance,
understand key
transactions andoperations, and identify
emerging risks.

DIMENSION

PRINCIPLE

CORE
charter or international
standards.

EXPANDED
and reporting structure,
its conformance withinternational standards,
and a high-leveldescription of thefunction’s activities
during the period.

COMPREHENSIVE
reporting structure andincludes statements ofconformance withinternational standards
and basis for thefunction’s audit
methodology. A highlevel description of thefunction’s activities during
the period is also
provided. The overall
opinion of periodic
external quality
assessments is disclosed.
Audit Committee: The central bank discloses whether an audit committee exists that reports to the Board, andwhether the activities are published.
The audit committee
In addition to core
In addition to expanded
composition and number practices:
practices:of meetings conducted
The central bank
A report of the audit
during the period arediscloses thecommittee is published,published.
responsibilities of theeither separately or within
audit committee as set
the annual report.
out in its terms ofreference/charter,
approved by the Board(or relevant body), and as
reviewed periodically.
The key activities vis-àvis the financial
statements and internal/
external audits aredescribed.

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36 INTERNATIONAL MONETARY FUND

No.

No.

DIMENSION
1.6.3. AntiCorruption
Measures andInternal Codeof Conduct7

PRINCIPLE

EXPANDEDCOMPREHENSIVE

Anti-corruption Measures and Internal Code of Conduct: The central bank discloses whether domestic anticorruption legislation and related measures apply to the decision-makers, staff, and agents of the central bank. It
also discloses its internal Code of Conduct, with additional requirements specific to central bank management
and staff.
The central bank discloses
whether anti-corruption
legislation and measures(e.g., criminalizing
corruption offenses, laws toaccess information, andwhistleblower protection)
are applicable to decisionmakers, staff, and agents ofthe central bank.

The central bank’s legal
framework clearly notesthat anti-corruption
legislation and measuresapply to decisionmakers, staff, and agentsof the central bank.
The central bankdiscloses specificrequirements on
expected behavior ofstaff to prevent
corruption and conflict ofinterest. This could
include requirements
regarding key objectives
and expected behaviors,
the application to all
employees/Board
members, and thecoverage of relevant andimportant issues or risk
areas. Sanctions forviolations may bedisclosed.

In addition to corepractices:
The central bankregularly discloses andpublishes updated
information on its rules
applicable to its staff andagents:ethics rules andvaluesthe definition ofcorruption offenses
rules to prevent
conflicts of interest
rules on theacceptance of gifts
and favors
rules on abstention
from decisions wherea conflict of interests
exists.
guidance on external
activities, outside
income, andrestrictions on central

In addition to expanded
practices:
The central bankpublishes updated
information on theapplicability of otheradditional ethics andcompliance resources,
including any
whistleblowing
mechanisms, and rules foraccessing confidential
information held by thecentral bank.
The central bank discloses
whether internal controls(such as measures tosafeguard the
independence, ensureaccountability andenhance the capacity of
Ethics Officer(s) or
Advisors) are establishedto ensure the proper

The reference to Code of Conducts includes similar regulations covering identical practices such as disciplinary regulations, and ethics rules.

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INTERNATIONAL MONETARY FUND 37

The central bank discloses
its internal rules or Code of
Conduct containing
measures to prevent
conflict of interest andcorruption, such as rules
concerning ethics andvalues, and acceptance ofgifts.

7

CORE

DIMENSION

PRINCIPLE

CORE
The central bankdiscloses whether a Codeof Conduct has been
adopted. If one exists, it
is published on thecentral bank’s website.

1.6.4.

Human
CapitalManagement-

EXPANDED
bankers’ pre- andpost-public
employment(“cooling off”
periods).
requirements on
declaring assets ofstaff and otherenforcement
mechanisms
designed to ensurecompliance withconflict of interest
rules.

COMPREHENSIVE
implementation of theCode of Conduct.

The central bankdiscloses whether its
organizational framework
includes an internalfunction (e.g., Ethics
Officer(s) or Advisors)
responsible for ensuring
the receipt of complaints
and proper
implementation of rules.
The central bank discloses its policies and practices concerning the governance and management of humancapital.
The central bank discloses
The central bankIn addition to core
In addition to expanded
its policies and practices
discloses accessible
practices:
practices:with regard to theinformation on:
The central bank
The central bank discloses
governance andrecruitment and staff discloses an
how the Human Capitalmanagement of humanturnoveraccountability
Management function

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38 INTERNATIONAL MONETARY FUND

No.

No.

DIMENSION

PRINCIPLE
capital. If available, a salaryscale for central bank staff
is published.

CORE
staff development
leadership andsuccession
diversity andinclusion.
Information may appear
in the annual report in a
separate report.
-

EXPANDED
mechanism for humancapital management. It
includes reporting andreview of the staffing
related matters between
middle/senior
management and the
body charged withoversight of thesematters.

COMPREHENSIVE
supports the central
bank’s mandate andstrategy.
The central bank discloses
policies on how it attracts,
promotes, and retains
staff.

The central bankdiscloses whether its staff
are recruited andpromoted on nonpolitical grounds,
including references torelevant national laws

INTERNATIONAL MONETARY FUND 39

1.7.

Communication
1.7.1.

Arrangementand discrimination.
The central bank discloses means and methods of communication and the forms of disclosure of information toits stakeholders.
In addition to core
In addition to expanded
The central bank discloses
The central bankpractices:
practices:
the organizational
discloses information onThecentralbank
The central bank discloses
structure, responsibilities,
the communications
and processes related tofunction within theexternal communication.

central bank. This
includes, for example,
information on theplacement of thediscloses information on

detailed information on

how its communication

communication

processes are integrated

arrangements, forinto its core activities.

example the publicationof internal principles and

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that prohibit patronage

DIMENSION

PRINCIPLE

CORE

EXPANDEDCOMPREHENSIVE

communications function

guidelines for externalin the organization

communication.

structure, and the senior
executives responsible
for the communications
1.7.2.

Strategy/Tools

The central bank discloses
the objectives, target
audiences, channels, andtools of communication
policy.

function.
The central bankdiscloses guidance on
how and by which media
it releases information.

In addition to corepractices:
The central bankdiscloses clear and easily
accessible guidance on
how and by which media
it releases information. It
actively promotes thisinformation throughannouncements,
statements, reports,

In addition to expanded
practices:
The central bank actively
engages with the public
and stakeholders on its
communication policy andactively evaluates its
communication policy
through, for example,
surveys. Efforts aredescribed in the central
bank’s annual report.

media conferences, news
releases, statistics,
speeches, official
information or secrecy
acts, and
1.8.

Confidentiality

research/technical notes.
The central bank discloses its policy on confidentiality or secrecy of central bank information, including thereasons underlying the choices it has made on disclosure or non-disclosure of sensitive information.
The central bank discloses
The central bankIn addition to core
In addition to expanded
its policy on confidentiality
publishes a policy onpractices:
practices:or secrecy regarding
confidentiality and
The central bank
The central bankinformation managed,
secrecy. This policy
publishes timely
publishes information on

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40 INTERNATIONAL MONETARY FUND

No.

No.

DIMENSION

PRINCIPLE
gathered, or obtained byother means (either
partially or entirely) under
its control. The central bankdisclosures reasons fordisclosure (or nondisclosure), or theconsequences of choices
made by others (such as
government) for disclosure(or non-disclosure) of
sensitive information.

CORE
includes reasons behind
its policy decisions on
confidentiality or secrecy,or which emerge from(compliance with)specific legislation.

The central bank also
discloses the relevantlaws, regulations, orvoluntary policies orstandards adopted by
the central bank that
expand or limit its
confidentiality or secrecy(see also principle 1.1 on
Legal Structure).
Selected principles from BCP, ICP, IOSCO, KA, and PFMI (see Annex).
CORE

COMPREHENSIVE
whether it actively sought
out input fromstakeholders on its policy
on confidentiality andsecrecy (and updates
thereof), and if so, in what
form, and its reasons fordoing so.
The central bankpublishes (anonymous oraggregated) information
on possible legal disputes
surrounding its policy on
confidentiality andsecrecy.

EXPANDEDCOMPREHENSIVEINTERNATIONAL MONETARY FUND 41

No.
2

DIMENSION

2.1.

Monetary Policy

The central bank publicly and clearly discloses the objectives, policy framework, and instruments of monetary

2.1.1. Objectives
andFramework

policy.
The central bank discloses
its monetary policy
framework and strategy forachieving its objectives.

PILLAR II—POLICIESThe central bankdiscloses the conceptual
framework underpinningits monetary policy.

In addition to corepractices:
The central bank discloses
important aspects anddimensions regarding
how the monetary policy

In addition to expanded
practices:
The central bank has anarticulated strategy for thepractical implementationof its policy frameworkthat is regularly

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PRINCIPLE

EXPANDED
information on when its
policy on confidentiality
and secrecy is updated,
the reasons for such an
update, and the possible
consequences for various
stakeholders of thecentral bank.

DIMENSION

2.1.2. Policy
Decisions

PRINCIPLE

CORE

The central bank discloses

The central bankits monetary policy

discloses, in a timely

decisions in a timely mannermanner, decisions

and indicates how the

regarding its policy

decisions foster the

instruments, which mayachievement of its monetary

include decisions or

policy objective(s). The

implications about thecentral bank discloses thesize and composition ofprocess by which policy

the central bank balance

decisions are taken,

sheet. Information on the

including with respect tocomposition andthe meeting calendar of its

structure of the monetary

monetary policy decision-

policy decision-making

making bodies and theirbody of the central bankvoting procedures.

and its advance meeting

EXPANDED
framework is
implemented.
In addition to corepractices:
The central bank discloses
an explanation ofmonetary policy decisions
in the context of its
monetary policy
objective(s) and acomprehensive accountof policy deliberations
within a reasonableamount of time.

COMPREHENSIVE
communicated—includingin the context of policy
decisions.
In addition to expanded
practices:
The central bank discloses
a detailed explanation ofits monetary policy
decisions in the context ofits monetary policy
objective(s) andframework and acomprehensive account ofpolicy deliberations andvoting behavior ofdecision-makers within areasonable amount oftime. The central bankprovides regular venues

schedule is publicly(e.g., press conferences)available.

for the media to ask
questions and further
clarify the rationale for the

2.1.3. Supporting
Analysis

The central bank discloses
relevant economic
information and supporting
analysis that inform its
monetary policy decisions.

The central bankdiscloses relevant
economic data andanalysis underlying

In addition to corepractices:
The central bank discloses
its macroeconomic
forecasts, including for

decisions.
In addition to expanded
practices:
The central bank discloses
scenario analysis to help
explain how its policy

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42 INTERNATIONAL MONETARY FUND

No.

No.

DIMENSION

PRINCIPLE

CORE
monetary policy
decisions.

EXPANDED
key economic andfinancial variables
regarded as most relevant
for achieving its policy
objectives. The timing
and extent of suchdisclosures are publicly
available.

COMPREHENSIVE
decisions foster
attainment of its policy
objectives as well as
highlight risks to theoutlook. The central bankalso discloses the relevant
models used for forecasts
and scenario analysis that

2.2.

inform its policy decisions.
The central bank is clear about its role in determining and implementing the policy 8 on cross-border financial
flows9 and foreign exchange administration. It discloses the objective(s), the legal and institutional frameworks it isacting under, its policy decisions, as well as the process by which policy decisions are taken.

The central bank discloses
the policy’s objective(s),legal and institutionalframeworks, and thestrategy to achieve thepolicy objectives. There isclarity whether the central
bank can delegate some of

The objectives and legal
and institutional

Similar to corepractices:

frameworks of the policy
are clearly defined anddisclosed.

In addition to expanded
practices:
The strategy to achieve thepolicy objectives is clearly
defined and disclosed.

In general, the policy on cross border financial flows and foreign exchange administration relates to current and financial account transactions, transactions inforeign currency within the country (including as a business activity), and transactions in domestic currency between non-residents.
9

Under Article VIII, Section 2(a) of the IMF’s Articles of Agreement, a member may not impose restrictions on the making of payments and transfers for current

international transactions without the (prior) approval of the Fund. Under Article VIII, Section 3, Fund members are prohibited from engaging in any discriminatory
arrangement or multiple currency practices without the approval of the Fund (link). The IMF Institutional View (IV) on liberalization and management of capital
flows (2012) articulates the Fund’s view on members’ policies to liberalize and manage capital flows (link).

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INTERNATIONAL MONETARY FUND 43

8Cross-Border
Financial Flowsand Foreign
Exchange
Administration
2.2.1. Objectives
andFramework

DIMENSION

PRINCIPLE
its functions to implement
policy decisions to otherentities and on themodalities of suchdelegation.

CORE
The attributions,
responsibilities, andpowers of the central
bank with respect to thepolicy are clearly
distinguished from thoseof the government/ otheragencies in this area andare included in therelevant legal framework(e.g., central bank law or
foreign exchange law)which is disclosed.
The central bankdiscloses information on:whether it candelegate some of its
functions in
implementing thepolicy decisions toother entities
the entities and themodalities of suchdelegation. The
central bank also
discloses the relevant
legal framework.

EXPANDEDCOMPREHENSIVE

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44 INTERNATIONAL MONETARY FUND

No.

No.

DIMENSION
2.2.2. Policy
Decisions

PRINCIPLE
Policy decisions, whether on
new actions or changes tostanding policy or otherchanges in the regulatory
framework, are publicly
announced, explained, anddisclosed in a timely
manner. The central bank isclear about the process bywhich policy decisions aretaken.

CORE
The central bankdiscloses: (i) the
information on thedecision-making process
and its stages (e.g.,
elaboration of proposal,
drafting of the decision,
public consultation etc.);and (ii) the role andresponsibilities of its
decision-making bodies
involved in the process
and the frequency of
their meetings.

INTERNATIONAL MONETARY FUND 45

2.2.3.

Supporting
Analysis

The central bank discloses
in a timely manner the
supporting analysis,
including the intended
outcome that informs its
policy decisions.

The central bankdiscloses in a timely
manner the generalconsiderations that
underly a policy decision.
The expected outcomesof policy decisions, in the

COMPREHENSIVE
In addition to expanded
practices:
The central bank provides
opportunity for public
discussion on draft policy
decisions.

Draft policy decisions aredisclosed in a timely
manner.

The central bank discloses
on its website theinformation related to the
public consultation of apolicy decision, including
its feedback on thecomments received during
this process.

The rationale of each(draft) policy decision in
the context of the policy
objectives is disclosed ina timely manner.
The central bank invites
comments on the draft
policy decision fromthose affected by it anddiscloses the commentson its website.
In addition to corepractices:
Detailed considerations(economic and otherconditions and theiranalysis) that result in apolicy decision, especiallyin case of introduction ofa new measure or achange in the policy, are

In addition to expanded
practices:
With respect to a (draft)policy decision, the central
bank discloses in a timely
manner information about:each policy option it
considered as analternative to the

THE CENTRAL BANK TRANSPARENCY CODE

Policy decisions(regulatory framework)
are disclosed ensuringthat there is sufficientlead time for those whoare affected by thechanges to adjust.

EXPANDED
In addition to corepractices:
Policy decisions are
explained to the publicthrough Q&As that areeasily accessible.

DIMENSION

PRINCIPLE

CORE
context of the policy
objectives, are disclosed.

EXPANDED
disclosed in a timely
manner.
--COMPREHENSIVE
option reflected in the(draft) policy decisionconsiderations(supporting analysis)
for alternative options
the rationale for the
choice of the option
reflected in the (draft)policy decision.

The central bankperiodically informs the
public about the changes
in the conditions that can
result in a new measure orin a change in the policy(e.g., in the context of thecapital accountliberalization roadmap)
and discloses suchinformation.
2.3.

Foreign ExchangeManagement
2.3.1.

Objective
andFramework

The central bank clearly and publicly discloses its foreign exchange policy objectives, including the hierarchy ofobjectives, and the operational framework and instruments of foreign exchange interventions.
The central bankIn addition to core
In addition to expanded
The central bank discloses
disclosesthebroadpractices:
practices:
its policy objectives, andobjectives of foreign
The central bank discloses The central bank discloses
legal, operational, andexchange intervention
its policy objectives, andgeneral rules of foreign
institutional frameworks,
policy, and its interaction
legal and institutional
exchange management
consistent with the chosenwith monetary policy.
frameworks.
policy instruments, is clear
foreign exchange regime.
on intended objectives,
key assumptions, and

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46 INTERNATIONAL MONETARY FUND

No.

No.

DIMENSION

2.3.2.

PolicyDecisions

PRINCIPLE

CORE

EXPANDED

The central bank discloses

The central bankdiscloses its decisionmaking structure,process, and authority toreach foreign exchangeintervention decisions.

In addition to corepractices:
The central bank explains
the key objectives, policy
framework, rationale of its
policy decision, and how
these interact with
monetary policy
objectives.

its decision-making process,including the rationale forforeign exchange
management instruments,
and the means andmethods of reaching adecision. The potential
impact of its policy

COMPREHENSIVE
framework of reachingdecision to intervene.
In addition to expanded
practices:
The central bank discloses
the rationale andoperational rules offoreign exchangeintervention policy, as wellas the instruments it uses
and how these interact
with monetary policy. The

decisions is explained in acentral bank discloses ex-timely manner.

post minutes of relevant
committee meetings (e.g.,
Monetary Policy
Committee) with a definedSupporting
Analysis

INTERNATIONAL MONETARY FUND 47

The central bank discloses
assumptions, transmission
channels, and analysis
backing the intervention
policy decisions, as well as
ex-post evaluations of
economic impact.

The central bankdiscloses the rationale
and economic analysis
backing its intervention
decisions in statements
by the relevant decisionmaking committee (e.g.,
Monetary Policy
Committee).

In addition to corepractices:
The central bank discloses
the analysis backing its
policy decision and anychanges to operational
mechanisms andtransmission of foreignexchange intervention
policy.

lag.
In addition to expanded
practices:
The central bank discloses
the analysis backing its
policy decisions, anychanges to operational
mechanism, and conducts
ex-post evaluation of the
impact of foreignexchange intervention
policy at a defined
frequency.

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2.3.3.

DIMENSION
Foreign Exchange
Reserve
Management
2.4.1. Objectives
andFramework

PRINCIPLE
CORE
EXPANDEDCOMPREHENSIVE
The central bank discloses its policy objectives for foreign exchange reserve management, along with key
considerations behind the policy, details on how oversight responsibility is allocated, and the potential impact ofthe policy.
In addition to expanded
The central bank discloses
The central bank discloses
In addition to corepractices:
broad investment
the broad objectives, broad practices:
objectives, operativerisk exposure, governanceThe central bank discloses The central bank publishes
models, how it allocateswith oversightthe objective of eachkey objectives,
oversight responsibility,
responsibility, andgovernance, risk exposure policy decision,and the institutional
investment structure ofgovernance, risk exposure(credit and market), andframework of its policy
foreign exchange reserve(credit and market), andinvestment constraints. It
decisions.
management.
investment benchmarks. It
discloses how policy
decisions interact with
key objectives and otherpolicies.

2.4.2.

2.4.3.

PolicyDecisionsSupporting
Analysis

The central bank discloses
key elements of policy
formulation, related risk
exposures, instruments,
decision-making hierarchy
and the oversightallocation process.

The central bank discloses

The central bank discloses
the key assumptions and

The central bank discloses

its decision-making
structure and authority toreach its investment andrisk decisions.

the rationale and economic

In addition to corepractices:
The central bank discloses
its decision-making
process, key assumptions,
methods of reaching its
investment and risk
decisions, and how it
allocates oversight
responsibility.

In addition to corepractices:

details how each of theseinteract with other policies.
It is clear how theadequacy and liquidity ofreserves are determined.
In addition to expanded
practices:
The central bank discloses
its decision-making
hierarchy and oversight
responsibility, key
considerations forreaching decisions, andex-post disclosure ofinvestment committee
deliberations with adefined lag.
In addition to expanded
practices:

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48 INTERNATIONAL MONETARY FUND

No.
2.4.

No.

2.5.

DIMENSION

Macroprudential
Policy2.5.1.

Objectives
andFramework

PRINCIPLE
assessment process
related to its policy
decisions.

CORE
analysis backing its
strategic investment andrisk decisions.

EXPANDED
The central bankpublishes analysis
backing its strategic
decision on investment
and risk policy, and anychanges to operational
mechanisms.

COMPREHENSIVE
The central bank publishes
analysis backing its policy
decisions, any changes tooperational mechanisms,
and ex-post evaluations ofimpact of investment andrisk assessment at adefined frequency.

The objectives, decision-making process, and instruments of macroprudential policy are clearly communicated tothe public. Indicators and supporting analysis to assess the need for macroprudential measures are disclosed
alongside policy decisions.
The central bank discloses
its macroprudential policy
framework, including its
objectives, instruments, andstrategy for achieving its
objectives.

The central bankdiscloses the conceptual
framework underpinningits macroprudential policy
function.

In addition to expanded
practices:
The central bank has acomprehensive, articulated
strategy for the practicalimplementation of its
policy framework. The
strategy is regularly
communicated anddisclosed, including in thecontext of policy decisions.

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INTERNATIONAL MONETARY FUND 49

In addition to corepractices:
The central bankpublishes important
facets of its
macroprudential policy
strategy, linking its
macroprudential policy
tools to its
macroprudential policy
objectives. This could
include intermediateobjectives pursued withparticular policy tools, theinformation used to arriveat policy decisions (suchas early warning
indicators and stress test
results), and the way it
intends to take accountof potential side effects

DIMENSION

2.5.2.

PolicyDecisions

PRINCIPLE

CORE

The central bank publicly

Introduction of or
adjustments tomacroprudential tools are
publicly announced in atimely manner with due
consideration given to
frontloading issues (in thecase of flow-based
macroprudential tools).
The information on thecomposition andannounces its
macroprudential policy
decisions in a timely mannerand discloses the decisionmaking process leading up
to macroprudential action.

structure of themacroprudential policy

EXPANDED
and costs ofmacroprudential
instruments.
In addition to corepractices:
The central bank provides
a detailed explanation of
the rationale and benefitsof macroprudential policy
decisions in the context
of macroprudential policy
objectives. It provides acomprehensive accountof policy deliberations
within a reasonableamount of time.

The central bank discloses
the key indicators andanalyses used to assess theneed for macroprudential
measures. It explains therationale and the expectedtransmission channels ofpolicy instruments inachieving their objectives.

vulnerabilities andprovides justification in theevent it did not takemitigating policy actions. It
provides a comprehensive
account of policy within areasonable amount oftime, disclosing how

its macroprudential policy

upcoming meeting
Supporting
Analysis

its assessment of potential

records) about the level ofthe central bank and its

2.5.3.

In addition to expanded
practices:
The central bank discloses

decisions (e.g., voting

decision-making body ofschedule are disclosed.
The central bankpublishes statements(e.g., a Financial Stability
Report) analyzing
financial stability issues
and discloses how
macroprudential tools are
expected to mitigate therisk.

COMPREHENSIVE

tools are taken.
In addition to corepractices:
The central bankperiodically publishes
indicators (such as early
warning indicators or
stress test results) and
explains how they relate
to the need for
macroprudential policy
action.

In addition to expanded
practices: The central bankpublishes ex post evaluationsof policy actions thatexamine whether tools had
the intended effects.

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50 INTERNATIONAL MONETARY FUND

No.

No.
2.6.
2.7.

DIMENSION
Microprudential
Supervision
Emergency
Liquidity
Assistance

PRINCIPLE
CORE
Selected principles from BCP, ICP, and IOSCO (see Annex).

EXPANDEDCOMPREHENSIVE

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INTERNATIONAL MONETARY FUND 51

The central bank discloses the scope and objectives of emergency liquidity assistance, while maintaining the necessaryconfidentiality, to preserve financial stability and in support of monetary policy and its implementation.
In addition to core
In addition to expanded
While maintaining a level of
The central bank discloses
practices:
practices:confidentiality that preserves
the basic features of its ELA
The central bank discloses
The central bank discloses
financial stability and supports mechanism that allows it to the different
the general rules,
monetary policy andprovide (in a discretionary
forms/operations in whichparameters, and conditions
liquidity support may be
implementation, the central
manner) bilateral orfor each form of liquidity
provided, therebybank discloses the scope ofmarket-wide emergency
distinguishing between
support. General rules andemergency liquidity assistance liquidity support to thebilateral and market-wide
applicable parameters
mechanisms at its disposal,
financial system. The levelliquidity support. Thisshould include (i)should provide clarity on
and the objectives for theirof transparency (i.e.,
institutional eligibility
use.
timeliness, scope, and level institutional eligibility forsuch support, the central(including the set of entitiesof detail of information)bank’s decision-making
or markets that are generally
provided must not interfere process, whether othereligible for liquidity support);
with the financial stability
agencies are involved, and(ii) conditionality (including
its disclosure policy.
objective or impair any
the ability of the central
confidentiality
bank or supervisory
requirements. The level ofauthority to collect, monitor,transparency should not
and assess information on
diminish the central bank’s
whether the use of thediscretion/freedom toliquidity provided isdecide on a case-by-caseconsistent with thebasis if liquidity support isobjectives of the liquidity
provided, and in which
support); (iii) supervisory
form and under which
intrusion (including theconditions liquidity support
central bank’s or supervisor’s
is provided.

DIMENSION

PRINCIPLE

CORE

EXPANDEDCOMPREHENSIVE
legal power to conductenhanced supervisory
oversight and the ability toadopt early intervention
measures); and (iv) financial
parameters (including theapplied interest rate, eligible
collateral, maturity, andcurrency in which liquidity
support is provided).

2.8.
2.9.
2.10.

10

Resolution
Financial Market
Infrastructures
Financial Integrity

Selected principles from KA (see Annex).
Selected principles from PFMI (see Annex).
The central bank discloses its policies and powers for Anti-Money Laundering/Countering the Financing ofTerrorism supervision, and a description of its control framework relating to the activities or services that may giverise to money laundering/terrorist financing risk.10
In addition to core
In addition to expanded
The central bank discloses
The central bankpractices:
practices:
information relating to its
discloses an overview ofThe
centralbankdiscloses
The central bank discloses
policies and powers
its AML/CFT supervisorywhether revisions of
how it ensures
supporting its Anti-Money
policies, and related
supervisory
policiesandconsideration of theLaundering/Countering theguidance, as well as
guidanceareinprivate sector’s feedback
Financing of Terrorism
information on its
consultation with theon the implementation of(AML/CFT) supervisory
AML/CFT supervisory
privatesector.
the policies and guidance.
activities.
powers.
In addition to core
In addition to expanded
The central bank discloses a The central bankpractices:
practices:discloses
informationondescription of its internal

As central bank mandates vary, internal AML/CFT control frameworks relate to instances where a central bank engages in activities or services that give risk to

Money Laundering/Terrorist Financing (ML/TF) risk. Such activities may include: the provision of bank accounts, correspondent banking, foreign exchange activities,
and the operation of payment systems. Central banks will need to determine the activities/services that give risk to ML/TF risk on a case by case basis.

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52 INTERNATIONAL MONETARY FUND

No.

No.

DIMENSION

PRINCIPLE
AML/CFT control framework
relating to its activities orservices that give rise tomoney laundering andfinancing of terrorism risk.

ConsumerProtection

No.

DIMENSION

INTERNATIONAL MONETARY FUND 53

3
3.1.

The central bank discloses
its policies relating toconsumer protection,
conducted solely or jointlywith other agencies.

PRINCIPLE

EXPANDEDCOMPREHENSIVE
The AML/CFT internal
The central bank discloses
control policies are
how it ensures the timely
audited by an
remediation of any
independent party,
identified weaknesses,
preferably an
confirmation that all
independent andresults have been
reputable third party, and addressed is published.
the results are presented
to the Board,confirmation that theresults were presented to
the Board is published.
The central bank publishes its consumer protection policies. This includes policies
relating to disclosure measures and transparency of financial institutions, fairtreatment and business conduct, data protection and privacy usage of customer
data, an ombudsman or other official appointed to investigate consumer
protection-related complaints (where the central bank holds such an oversite
function, or cooperates with an agency that does), or practices in informationsharing and dispute resolution mechanisms.
CORE

EXPANDEDCOMPREHENSIVEPILLAR III—OPERATIONS
Monetary Policy
The central bank discloses its operational framework with a well-defined operational target, objectives,
instruments, collateral, and access criteria.

THE CENTRAL BANK TRANSPARENCY CODE

2.11.

CORE
its internal AML/CFT
control framework.

DIMENSION
3.1.1. Instruments

PRINCIPLE
The central
bank discloses

CORE

EXPANDED

The set of monetary policy instruments is disclosed
to the public.

In addition to corepractices:
The operationaltarget is clearly
defined and disclosed
to the public.

its monetary
policyinstruments.

COMPREHENSIVE
In addition to
expandedpractices:
The operationaltarget and thelink between theoperationalframework andmonetary policy
objectives isdisclosed.
The role ofreserverequirements is

3.1.2. Coverage

The central
bank discloses:(i) the type of
instrument(open market
operations,standing
facilities, otherfacilities,
reserverequirements,
and direct
instruments of

The central bank discloses the terms and conditionsof monetary operations and reserve requirements.
The eligible collateral is defined and published.
The general characteristics of each instrument ispublished.
The reserve requirements’ ratio, remuneration, andaveraging provision (if any) are published.

In addition to corepractices:
The central bankdiscloses terms andconditions that
explain how the levelof reserve
requirements isdetermined.

disclosed.
In addition to
expandedpractices:
The central bankdiscloses
detailed
regulations onmonetary
operations andreserverequirements.
These arepublished on thecentral bankwebsite and

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54 INTERNATIONAL MONETARY FUND

No.

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DIMENSION

PRINCIPLE
monetary
control); (ii) the
characteristics
of eachinstrument;and (iii) thecollateral

CORE

EXPANDEDCOMPREHENSI
VE
regularly
updated.
The regulations
explain how
open market
operations arecalibrated.

framework.

INTERNATIONAL MONETARY FUND 55

The role of thereserverequirements
and details on
the framework
and parametersof reserve
requirements aredisclosed.

THE CENTRAL BANK TRANSPARENCY CODE

The detailed
characteristics(maturity,interest rate,
auctioning
method,collateral andhaircuts, etc.) of
each instrument
are publishedand regularly
updated.

DIMENSION

3.1.3. Access

3.2.

Cross-Border
Financial Flows andForeign Exchange
Administration
3.2.1. Instruments

PRINCIPLE

CORE

EXPANDEDCOMPREHENSIVE

The use of
forwardguidance (if any)
is disclosed.
In addition to core
In addition to
The central
The categories of monetary policy counterparties
practices:
expandedbank discloses
and respective access rights are clearly definedpractices:The
centralbank
the monetary(category of banks, primary dealers, micro-finance
The list of
discloses thepolicyinstitutions, etc.) and disclosed.
eligibleeligibility
criteria
ofcounterparties’
institutions,monetary
policyframework.
counterparties ofcounterparties, aswell as the terms and monetary
operations, andconditions fortheir respective
participating.
access rights ispublished andregularly
updated.
The central bank discloses how it implements this policy in terms of the instruments and the scope of its
operations and actions.

The central
bank’sinstruments for
implementing
the policy andthecircumstancesin which they

The set of instruments (as a minimum, theregulatory framework, licenses/approvals, reports,monitoring and enforcement instruments, andforeign exchange transactions conducted by the

In addition to corepractices:
The central bankprovides anddiscloses a brief
description of eachregulatory instrument(e.g., the objective
and scope of an act).

Similar to
expandedpractices

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56 INTERNATIONAL MONETARY FUND

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No.

DIMENSION

PRINCIPLE
can be used
are clearly
defined anddisclosed.

CORE
central bank)11 that the central bank can use to
implement the policy are clearly defined anddisclosed.
The regulatory framework as well as explanations
on types and hierarchy of regulatory instruments
are disclosed.

COMPREHENSI
VE

The central bankdiscloses in a timely
manner the mostrecent consolidated
version of eachregulatory instrumentthat incorporates allchanges.

INTERNATIONAL MONETARY FUND 57

The circumstances in which the instruments can beused are clearly defined and disclosed.

11

Some of these transactions are usually conducted by commercial banks, but the central bank can be empowered to do them in countries with less developed foreignexchange markets or where the banking system has limited capacity. These transactions do not include the central bank’s operations performed for foreign exchange reserve
management and foreign exchange interventions’ purposes. Foreign exchange transactions of the central bank with the government and other domestic and foreign agencies
are covered by Pillar V.

THE CENTRAL BANK TRANSPARENCY CODE

The following information about the instruments is
also disclosed:
types of licenses/approvals that the central
bank can granttypes of reports to be submitted to the centralbanktypes of monitoring and enforcement
instruments (including sanctions) the central
bank can use
types of foreign exchange operations thecentral bank can perform withentities/individuals, including applicable fees.

EXPANDED

DIMENSION

PRINCIPLE

CORE

EXPANDED

3.2.2. Coverage

The central
bank discloses
information
about thepersons(entities andindividuals),transactions,and other
aspects of theforeignexchange
system that it
can and does
regulate;
persons,transactions,and activities
that it canlicense,approve,monitor, andsanction; andforeignexchangetransactions
that it canperform.

The regulatory framework clearly defines, and thecentral bank discloses the following:

In addition to corepractices:
The central bankdiscloses:
detailed
description oflicensing/approva
l requirements,
and documents tobe submitted withthe request for alicense/approval
the conditions
for granting alicense/approvalautomatically (ifany)
the procedurefor imposing
sanctions fornoncompliancewith theregulatory
framework anddecisions inindividual cases.

-

-

-

-

-

-

-

the types of activities, persons, andtransactions the central bank is entitled toregulate/license/approve/perform/monitor/sanction
the rules and conditions for carrying out
regulated transactions (including prohibited
transactions, if any) and activities
licensing/approval requirements
the considerations underlying the decisions on
granting the license/approval (or denial of it)
for the various activities/persons/transactions
the procedure for granting licenses/approvals,
including the time limit within which a decisionmust be made and communicated to theaffected person and the role andresponsibilities of its decision-making bodies
involved in the process
the reporting requirements that entities(including banks) and individuals must comply
with and the types of persons/transactions thatare subject to such requirements
the forms in which required reports arecollected and the relevant compilation guidelines
the types of entities/individuals/transactions
that are subject to monitoring by the central
bank and the relevant monitoring instruments
types, scope, and extent of sanctions that canbe imposed for noncompliance

COMPREHENSIVE
In addition to
expandedpractices:
Aspects related
to the grantingof
licenses/approvals and useof/access toother policy
instruments are
explained to the
public throughQ&As that areeasily accessible.

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No.

No.

DIMENSION

PRINCIPLE

CORE-

EXPANDEDCOMPREHENSI
VE

the types of entities/individuals having accessto foreign exchange operations of the central
bank and the operations accessible to them.

Decisions in individual cases, including theconsiderations underlying the rejection of a request
for license/approval (if any) are communicated tothe affected persons in a timely manner.
3.3.

Foreign ExchangeManagement

The central bank discloses how it implements its foreign exchange policies framework in terms of instruments,

3.3.1. Instruments

The central

The central bank discloses the main instruments itbank discloses

intends to use to achieve the desired objectives ofthe set offoreign exchange intervention. The central bankinstruments

discloses foreign exchange management

used forcounterparties, eligibility criteria, and access to its

foreign

operations.

markets, size, and mode of access.

exchangepolicy, as well
INTERNATIONAL MONETARY FUND 59

as keyconsiderations
under whichthese arechosen.

the choice of
instruments, themodalities, andprovides rationale for
their use to achieve
its policy objectives. It
clearly defines
eligibility criteria of
its foreign exchange
management
counterparties andpublishes aregulation governing
their conduct,

In addition to
expandedpractices:
The central bankdiscloses the
choice of
instruments, themodalities, andprovidesrationale of each
instrument toattain the central
bank’s broader
foreign exchange
management
policy objectives.
The eligibility
criteria of theforeign exchange
management

THE CENTRAL BANK TRANSPARENCY CODE

management

In addition to corepractices:
The central discloses

DIMENSION

PRINCIPLE

CORE

EXPANDED
sanction rules, andmode of access.

3.3.2. Coverage

The central
bank discloses
the markets
and agents
who aretargeted by
the foreignexchangemanagement
policy.

The central bank discloses the foreign exchange
management framework of its operations, themarkets in which it operates (e.g., spot andderivatives), and its framework for choosing
institutions to transact with.

In addition to corepractices:
The central bankdiscloses the rules
governing modes ofoperations, andmarkets (e.g., spotand derivatives) thatare defined inregulations.
The eligibility criteriaof its foreignexchangemanagement
counterparties areclearly stated in a
regulation.

COMPREHENSI
VE
counterpartiesare clearly statedin a regulationand published on
the central bankwebsite.
In addition to
expandedpractices:
The coverage of
foreign exchange
management
operations isclearly defined,
including rules,
modes, andmarkets that are
updatedregularly and areavailable on thecentral bank’s
website.
The eligibility
criteria of its
counterparties,
including a
regulation
governing theirconduct,
sanction rules,

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60 INTERNATIONAL MONETARY FUND

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DIMENSION

3.4.

Foreign Exchange
Reserve
Management
3.4.1. Instruments

PRINCIPLE

CORE

EXPANDEDCOMPREHENSI
VE
and mode ofaccess, ispublished on thecentral bank’s
website.
The central bank discloses the general principles governing its foreign exchange reserve management operations,
including relationships with counterparties and service providers.
The central
bank discloses
the broadselection
criteria for
eligible asset
classes,composition of
instruments,
investment
horizon andconstraints.

The central bank discloses broad criteria on
selection of reserve assets, instruments, and limited
risk disclosures.

In addition to corepractices:
The central bankdiscloses compositionof eligible reserve
assets andinstruments, and risk
disclosures by asset
class.

In addition to
expandedpractices:
The central bankdiscloses
composition ofreserve assets,
instruments, anddisclosures onrisks exposure
instruments) at a

INTERNATIONAL MONETARY FUND 61

definedfrequency and3.4.2. Coverage

The central
bank discloses
its frameworkfor selecting
eligible market
counterparties

The central bank discloses broad criteria to selecteligible counterparties and service providers (e.g.,
dealers, custodians) and eligible issuers.

In addition to corepractices:
The central bankdiscloses rules andprocedures forselection of markets

time lag.
In addition to
expandedpractices:
The central bankdiscloses
aggregatedexposures at a

THE CENTRAL BANK TRANSPARENCY CODE

(by group andDIMENSION

PRINCIPLE

CORE

EXPANDED

and service

in which it operates,

providers (e.g.,counterparties,

dealers,

custodians, andcustodians)

service providers.

COMPREHENSI
VE
definedfrequency andtime lag.

and eligible
markets to
conduct its
operations.
3.4.3. Assessment

The central
bank discloses
criteria toassessadequacy andliquidity
parametersand discloses
its analysis atregularpredetermined
periods.

The annual report contains general discussion ofreserve adequacy and liquidity arising from its
investment activities.

In addition to corepractices:
The annual reportcontains a general
assessment of reserveadequacy, liquidity,
and limited risk
exposure specific toreserve management
operations.

In addition to
expandedpractices:
The central bankconducts annual
liquidity stresstests. It publishes
a reserveadequacy
assessment anda risk statement
outlining thefinancial,
operational, andother risks
arising from its
operations with adefined time lag.

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DIMENSION

3.5.

Financial Stability
Assessments andStress Testing
3.5.1. Financial
Stability
Assessments

COMPREHENSI
VE
The central bank periodically discloses its assessment of domestic financial stability to the public and istransparent about the methods used for such assessments, including its framework for stress testing.

INTERNATIONAL MONETARY FUND 63

The central
bankperiodicallyprovides to the
public its
assessment ofrisks tofinancialstability,
including new
and emerging
sources ofvulnerability.
The central
bank discloses
the methods
and key
assumptions of
the stresstesting
framework.

CORE

The central bank publishes from time to time
information on its assessments of some of thevulnerabilities of the financial system and istransparent on the methods underpinning suchassessments.

EXPANDED

In addition to corepractices:
The central bankregularly publishes acomprehensive
assessment of themain risks to financial
stability, including
new and emerging
vulnerabilities.

The central bank discloses results of the stresstesting analysis on an aggregated basis.

In addition to corepractices:
The central bankdiscloses the main
information on thedesign of themacroeconomic
stress scenario andthe risks covered,along with underlying
assumptions.

In addition to
expandedpractices: The
central bankdiscloses themethods andunderlying data
used for suchassessments, tothe extent suchdisclosure iscompatible withdata protection
rules.
In addition to
expandedpractices:
The central bankdiscloses
information on:(i) the type of
exercise(bottom-up, topdown, or a
combination ofboth); (ii) the
design of themacroeconomic

THE CENTRAL BANK TRANSPARENCY CODE

3.5.2. Macroprudent
ial Stress
Testing
Methods

PRINCIPLE

DIMENSION

PRINCIPLE

CORE

EXPANDEDCOMPREHENSI
VE
stress scenario,
including details
on its estimation,
plausibility, andtime horizon; (iii)the risks coveredand detail
information on
the models used;(iv) evolution offinancialstatements overthe stress test
horizon; (v) the
full set ofassumptions; and(vi) theregulatory
framework

3.5.3. Stress Testing
Coverage

The central
bank discloses
the coverageof the stresstesting
exercise.

The central bank discloses the type of institutions
covered in the stress testing (banks, pension funds,
insurance companies, or others).

In addition to corepractices:
The central bankdiscloses the type of
institutions coveredin the stress testing(banks, pension
funds, insurance

considered.
In addition to
expandedpractices:
The central bankdiscloses thetype ofinstitutions
covered in the
stress testing

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DIMENSION

PRINCIPLE

CORE

EXPANDED
companies, or others)
and the number of
institutions.

3.5.4. Central Bank
Use of Stress
Test Results

INTERNATIONAL MONETARY FUND 65

Macroprudential
Policy3.6.1. Design ofMacroprudent
ial Tools

THE CENTRAL BANK TRANSPARENCY CODE

3.6.

The central bankdiscloses whether
about the ways
and how aggregate
the central
stress testing resultsbank uses
may affect policy
stress test
decisions. The central
results.
bank discloses
whether and how
individual results may
affect policy
decisions.
The central bank discloses how it implements macroprudential policies, including the design of policy instruments
and enforcement arrangements.
In addition to core
In addition to
The central
The central bank discloses the design and scope ofpractices:
expandedbank discloses
application of macroprudential tools, including thepractices:
In addition to official
the precise
types of financial institutions (e.g., banks, non-bank
The central bankdesign anddocuments, thelenders) and financial instruments (e.g., mortgage
objectives ofcentral bank discloses consults theloans, other) subject to macroprudentialitspublic before
clear and accessible
macroprudenti constraints.
enacting majorstatements that
al instruments,changes to thedisclose the key
including thedesign ofdesign features of its
scope of
There is clarity

The central bank discloses the main purpose of thestress test.

COMPREHENSI
VE(banks, pension
funds, insurancecompanies, orothers) as well as
the names of theinstitutions
participating inthe stress test.
The central bankdiscloses how
stress test results
affect all otheraspects of its
dealings withfinancial
institutions.

DIMENSION

PRINCIPLE
entities andfinancial
instruments
subject tomacroprudenti
al constraints.

3.6.2. Enforcement

3.7.
3.8.

Microprudential
Supervision
Emergency
Liquidity
Assistance

CORE

EXPANDEDCOMPREHENSI
VE

tools and how theymacroprudential

may affect various

tools.

market participants.
Documents may havean educational

purpose).
The central
The central bank discloses which agencies enforce macroprudential regulations and discloses
bank discloses
both incentive mechanisms and penalties.
enforcement
mechanisms
andresponsibilities
for all entities
and financial
instruments
subject tomacroprudenti
al constraints.
Selected principles from BCP, ICP, and IOSCO (see Annex)
The central bank may disclose any ongoing provision of emergency liquidity assistance (including bilateral and market-wide
support) and its conditions and parameters once the need for confidentiality has ceased.
In addition to core
In addition to
The central
The central bank discloses the forms of market-widepractices:
expandedbank may beliquidity support and provides timely and complete
The central bankpractices:transparent
information in support of the financial stability
discloses the forms of
The central bankwith regard to
objective and the efficiency and effectiveness of themarket-wide liquidity
discloses the
support
and
one
of
two
forms of marketthe ongoingliquidity support. Information is provided on eligible
additional
channelsofwide liquidity
provision of ELA institutions, type of operation, financial parametersinformation:
support and both(including
additional

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66 INTERNATIONAL MONETARY FUND

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DIMENSION

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CORE

bilateral and(e.g., interest rates, eligible collateral, and maturities),

market-wide

and procedural requirements for participation.

support) and its
conditions andparameters assoon as theneed forconfidentiality
has ceased.
Suchtransparency
has broadconfidence andfinancialstability
implications and

EXPANDEDa)

The delineation ofliquidity support
operations fromstandard
operations, withinformation
regarding maturity,
amounts ofliquidity support,
and financial
parameters

COMPREHENSI
VE
channels outlined
in expanded
practices.

orb) How the liquidity
support measure isintended tocontribute torestoring/maintaini
ng financial
stability or market
functioning.

monetary policy
INTERNATIONAL MONETARY FUND 67

and its
implementation
.

3.9.
3.10
.

Resolution
Financial Market
Infrastructures

For bilateral liquidity support, information about the provision of support is disclosed only after thefinancial stability risk has passed, and no longer violates confidentiality requirements agreed on prior toentering the support agreement with the requesting institution.

Disclosure should also not diminish the central bank’s discretion/freedom to decide on a case-by-casebasis if liquidity support is provided, and in which form and under which conditions liquidity support isprovided.
Selected principles from KA (see Annex).
Selected principles from PFMI (see Annex).

THE CENTRAL BANK TRANSPARENCY CODE

may support

DIMENSION

3.11.

Financial Integrity

3.11.1. Processes

3.11.2. Controls

PRINCIPLE

CORE

EXPANDEDCOMPREHENSI
VE
The central bank discloses its anti-money laundering/countering the financing of terrorism supervisory processes,
as well as details about resources allocated to its internal Anti-Money Laundering/Countering the Financing ofTerrorism controls.
In addition to core
In addition to
The central
The central bank discloses general information on
practices:
expandedbank discloses
its approach to off-site and on-site AML/CFT
practices:
The central bankits AML/CFT
supervisory activities and on the human and
The central bankdiscloses
statisticalsupervisory
technical resources allocated to these activities.
maintains andinformationontheprocesses.
discloses up-tocompletion rates ofdate information
its off-site and onon the names ofsite AML/CFT
the financial
supervisory activities.
institutions it
supervises for
AML/CFT
purposes,
including up-todate information
regarding crossborder activities.
The central
The central bank discloses general information on
The central bank
The central bankbank discloses
its internal AML/CFT control activities and on thediscloses statistical
discloses
resources
human and technical resources allocated to internal information on theconfirmation that
allocated to its AML/CFT controls.
completion rates of
the adequacy ofinternal
its internal AML/CFT
the resources
AML/CFT
control activities.
allocated to its
controls.
internal controls
was subject to anindependent
audit, preferably
by an

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PRINCIPLE

3.12.

ConsumerProtection

The central
bank discloses
its operations
relating toconsumerprotection,
conducted
solely or jointlywith otheragencies.

4.1.

DIMENSION

INTERNATIONAL MONETARY FUND 69

PILLAR IV—OUTCOME
Monetary Policy
4.1.1. GovernanceActions

EXPANDEDCOMPREHENSI
VE
independent andreputable third
party, and theresults arepresented to theBoard.

The central bank discloses consumer protection measures taken against financial institutions, aswell as guidelines on fair treatment and business conduct, data protection and privacy usage ofcustomer data, information-sharing of consumer data, and dispute resolution mechanisms. It
also publishes statistics on measures taken by an ombudsman or other official appointed toinvestigate consumer protection-related complaints (the central bank may hold such an oversite
function or cooperate with an agency that does).

PRINCIPLE

CORE

EXPANDED

The central bank is transparent about the outcome of its monetary policy conduct.
In addition to core
The accountability of the The central bankpractices:
central bank on
discloses the
The central bankmonetary policy is clear,responsibilities of its
periodicallyin terms of to whom
governing bodies to (i)communicates to theaccountability is owed
report on the conduct of public and to designatedand how it is discharged
monetary policy topublic authority actions(i.e., means oftaken in order to achieve
designated public
accountability).
the policy objectives or,
authorities; (ii) describe
in the case of objectives
their performance in
not achieved, provides

COMPREHENSIVE

In addition to expanded
practices:
The central bank istransparent about its
interactions withdesignated publicauthority on monetary
policy.

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4

CORE

DIMENSION

PRINCIPLE

CORE
achieving theirobjective(s), and, where

EXPANDED
reasons and explanations
thereof.

COMPREHENSIVE

appropriate; and (iii)exchange views on thestate of the economy
with designated publicauthorities.
4.1.2.

Policies

The central bank

The central bankdiscloses progress

discloses indicators

toward achieving its

relating to the central

monetary policy

bank’s monetary policy

objective(s) as well as

objective(s) and releases

prospects for achieving

periodic public

them.

statements on progress
toward achieving its
monetary policy
objective(s).

4.1.3.

Operations

The central bankdiscloses the volumes
and interest rates ofmonetary policy
instruments, as well as
the level of theoperational target
achieved.

The level of theoperational target ispublished.
The outstanding volumes
and interest rates of each
instrument are published.
Aggregated bankbalances at the central
bank (bank reserves) are
published.

In addition to corepractices:
The central bankpublishes evaluations ofefforts to meet targets
and information about
economic developments

In addition to expanded
practices:
Methods, techniques, anddata underlying dedicatedmonetary policy
evaluations are publicly
accessible.

that could affect theprospects of achieving
monetary policy
objective(s).
The level of theoperational target isdisclosed daily to the
public.
The outstanding volumes
and interest rates of each
instrument are published.
The aggregated bankbalances at the central

The level of theoperational target isdisclosed daily on thecentral bank’s website.
The outstanding volumes
per instrument are
published frequently andin a timely manner on thecentral bank’s website.

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PRINCIPLE

CORE

EXPANDED
bank (bank reserves) are
published.

COMPREHENSIVE
Auction results are
published in a timely
manner on the central
bank’s website.
The aggregated bankbalances at the central
bank (bank reserves) andrealized autonomous
liquidity factors are
published frequently in atimely manner on thecentral bank’s website.

4.2.

The central bank discloses the outcome of its policy implementation.

The central bankdiscloses information
about to whom its

INTERNATIONAL MONETARY FUND 71

accountability on thepolicy is owed, and how
it is discharged.

A designated publicauthority to which thecentral bank is
accountable on thepolicy is disclosed, alongwith the frequency andthe manner in which thecentral bank is required
to report to thisauthority.
The central bankdiscloses information on
its governing bodies with

In addition to corepractices:
The central bankdiscloses information
about interaction of thegiven policy with otherpolicies (such asmonetary,
macroprudential, andfiscal policy).

Similar to expanded
practices

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Cross-Border Financial
Flows and Foreign
Exchange
Administration
4.2.1. GovernanceActions

DIMENSION

4.2.2.

Policies

PRINCIPLE

The central bankdiscloses on a regular

CORE
respect to policy
implementation, as wellas their responsibilities toreport on theimplementation of thepolicy and the central
bank’s performance inachieving the policy
objective(s).
The central bankdiscloses:
whether itdelegated some ofits functions in
implementing thepolicy decisions toother entities
the list of such
entities/types ofentities and their
responsibilities
whether such
entities are required
to report separately
on the outcome of
the implementation,or the central bank’sreport includes thisinformation.
The central bankdiscloses:

EXPANDED

In addition to corepractices:

COMPREHENSIVE

In addition to expanded
practices:

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PRINCIPLE
basis information about
the results in achieving
the policy objectives.

EXPANDED
The central bankdiscloses:
detailed informationon the actions taken
to achieve the policy
objectives and theirresults
the reasons for notachieving the policy
objectives (if this is
the case).

The central bankdiscloses on a regularbasis information about:- the regulatory
framework and anychanges to it- the types and numberof granted
licenses/approvals- the types and numberof inspections
conducted- the types and numberof sanctions imposed
for noncomplianceIn addition to corepractices:
The central bankdiscloses on a regularbasis detailed
information about:- the regulatory
framework and anychanges to it- the entities/individuals
licensed to perform
activities subject tolicensing (e.g., name,address, contact
details, type of thelicensed activity)--

4.2.3.

Implementation

The central bankdiscloses on a regularbasis information about
the results of the policy
implementation.

COMPREHENSIVE
Policy actions and theresults in achieving thepolicy objectives are
explained to the publicthrough Q&As that areeasily accessible.
The central bank discloses
a description of theforeign exchange regime,
including existing
restrictions related tocross-border transactions
and foreign exchange
operations within the
country and their impact
on the economy.
Similar to expanded
practices

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CORE
whether the policy
objectives have beenachieved
general informationon the actions taken
to achieve the policy
objectives and theirresults
developments that
influenced theimplementation of
the policy/decisions
and the desired
results.

-

4.3.

DIMENSION

Foreign ExchangeManagement
4.3.1. Governanceactions

PRINCIPLE

CORE- the types of foreignexchange operations
performed by thecentral bank withentities and individuals- the types and volumeof cross borderfinancial flows andforeign exchangetransactions within the
country.

EXPANDED- approvals granted- inspections conducted
and their results- sanctions imposed fornoncompliance- cross border financial
flows and foreignexchange transactions
within the country(data on an aggregate
basis).

COMPREHENSIVE

The central bank
The central bankpublishes lists ofdiscloses on a regular
entities/individuals
basis the results of its
licensed to perform
operations with entities
various foreign exchange
and individuals (on an
activities in the given
aggregate basis).
area (e.g., a list of
licensed foreignexchange bureaus) andupdates them regularly.
The central bank discloses how its governing committee is accountable for undertaking and reporting on
foreign exchange interventions.
The central bank is clear
Same as core practices
In addition to expanded
The central bankon its decision-making
practices:discloses its governancestructure and how it is
The central bank discloses
structure and theaccountable for foreign
the taxonomy of its
responsibilities of its
exchange management.
foreign exchange
governing bodies withmanagement framework,
respect to foreign
responsibilities of its
exchange management.
governing bodies with

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4.3.2.

Policies

PRINCIPLE

The central bankdiscloses the role offoreign exchange
management towardachieving its policy
objective(s) as well as its
interaction with broader
monetary policy
objectives.

CORE

The central bankdiscloses supporting
analysis backing its
intervention policy
decisions.

EXPANDED

In addition to corepractices:
The central bankpublishes its policy
decisions, theiroutcomes, and anychanges to operational
mechanisms of its
foreign exchange
management policy in its
annual report.

COMPREHENSIVE
respect to foreignexchange management,
and evaluations of thepolicy actions taken.
In addition to expanded
practices:
The central bank discloses
the mode used for foreignexchange management,
instruments used, anddata underlying policy
evaluations of foreignexchange interventions.
Information is disclosed in
the central bank’s
monetary policy report at

4.3.3.

Operations

The central bankdiscloses the results ofpublishes information ofits market operations,its foreign exchange

the level (volume) of

management andactivity, and direction of

volume of activity

its interventions (i.e.,(aggregated quarterly) inpurchasing or selling) on

its annual report.

its website and with apredefined time lag.

In addition to corepractices:
The central bankpublishes aggregatedon its interventions on its

data on its interventions

website. The aggregate(purchases and sales) involume of interventions,its monthly bulletin withand whether specifica predefined time lag

instruments were bought

and frequency.

or sold, is reported on amonthly basis. There is apredefined lag of not
more than a month

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The central banka defined frequency.
In addition to expanded
practices:
The central bank reports

DIMENSION

PRINCIPLE

CORE

EXPANDEDCOMPREHENSIVE(consistent with an official
release of report on theinternational reserves, as
per the Special Data
Dissemination Standard

4.4.

Foreign Exchange
Reserve Management
4.4.1. Governanceactions

4.4.2.

Reporting on
Implementationprescription).
The central bank discloses any changes to the general principles of internal governance and provides clarity
on the outcomes of its policy decisions about foreign exchange reserve management.
In addition to core
In addition to expanded
The central bank
The central bankpractices:
practices:discloses the generaldiscloses its institutional
The central bank
The central bank discloses
principles of internal
obligations and thediscloses
thegovernance on foreign
its framework, thegeneral principles of its
institutional obligations,exchange reserve
responsibilities of its
policy framework andobjectives, andmanagement mattersgoverning bodies with
operations.
responsibilities of its
to ensure the integrity
respect to reserve
decision-making bodies
of its policy formulation
management, and its
for reserveand operations.
evaluations of policy
management.
The central bankdiscloses data relating to
the level andcomposition of foreignexchange reserve assets,
short-term liabilities, andcurrency drains that canlead to demand on
reserves.

The central bankpublishes information
about the level offoreign exchange
reserve assets andliabilities, according to apredefined schedule.

In addition to corepractices:
The central bankpublishes information
about the level foreignexchange reserve
assets, liabilities, shortterm drains, andcommitments by themonetary authorities,
according to apredefined schedule.

actions taken.
In addition to expanded
practices:
The central bankpublishes outcomes as
per reserve data template
and the Special Data
Dissemination Standard.
The data categories
include: the official
reserves and other foreign
currency assets,

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CORE

EXPANDEDCOMPREHENSIVE
predetermined short-termdrains on reserve assets,
and contingent shortterm net drains on reserve
assets, according to a pre-

4.4.3

4.5.

Financial
Results

Macroprudential
Policy4.5.1. GovernanceActions

defined schedule.
In addition to expanded
practices:
Please refer to practices
under Pillar I Tools—
Independently Audited
Financial Statements andRisk Exposure.

disclosed.
4.5.2.

Policies

The central bank

The central bankdiscloses ex-post

publishes statements (orevaluations of its

embeds details inmacroprudential policies.

broader reports) on how
its macroprudential

In addition to corepractices:
The central bankpublishes dedicatedpolicy evaluations
around its specific

In addition to expanded
practices:
Methods, techniques, and(to the extent possible)
data underlying dedicated

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In addition to core
There is clarity in
Please refer to practices
practices:audited financial
under Pillar I Tools—
Please refer to practices
statements on the
Independently Audited
under Pillar I Tools—
amount, composition,
Financial Statements and Independently Audited
profit/loss, and risks
Risk Exposures (1.6.2).
Financial Statements
arising from foreign
and Risk Exposure.
exchange reserves.
The central bank discloses outcomes and evaluations of its macroprudential policy actions and its
accountability for such actions.
In addition to core
The accountability of the Legislation, agreements,
practices:
central bank on
or Memorandums of
Key interactions between
macroprudential policies Understanding specifying
the central bank andis clear as to whom
the central bank’s
designated public
accountability is owed to macroprudential policy
authorities on issues ofand how it is discharged. objectives andfinancial stability are
responsibilities of
disclosed.
governing bodies areDIMENSION

PRINCIPLE

CORE
policies affect financial
stability and

4.6.
4.7.

Microprudential
Supervision
Emergency Liquidity
Assistance

EXPANDED
macroprudential tools(stress tests, event
studies).

COMPREHENSIVE
policy evaluations are
made public.

vulnerabilities.
Selected principles from BCP, ICP, and IOSCO (see Annex).

The Emergency Liquidity Assistance framework allows for appropriate disclosure of the provision of liquidity support,
terms and conditions, and amounts provided, while maintaining confidentiality as long as required.
In addition to core
In addition to expanded
The Emergency Liquidity
For market-wide liquidity
practices:
practices:
Assistance framework (forsupport, the framework
The framework provides
The framework discloses
bilateral and market-wide
discloses the amount,
information about how andhow the liquidity support
support) provides details
conditions, and types ofto what extent the liquidity
measures impact othersupport measureon previous support andentities that received
parts of the financial system
contributed totheir outcomes, while
support.
restoring/maintaining
and the economy more
maintaining confidentiality
financial stability or market broadly. The central bankas long as required tofunctioning.
discloses information on
It also provides information
preserve financial stability
interaction with financial
on the central bank’s risk
and in support of monetarytaking in connection withmarket functioning,
policy and its
the support.
microprudential supervision,
implementation.
macroprudential regulationand supervision, andwhether assistance hascross-border effects.
For bilateral liquidity support, information about the provision of support is disclosed
only after the financial stability risk has passed, and no longer violates confidentiality
requirements agreed on prior to entering the support agreement with the requesting
institution. Such information should neither diminish central bank discretion, nor affectother institutions’ expectations on the provision of bilateral support. Disclosing
information on bilateral liquidity support (with adequate delay) will ensure

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EXPANDEDCOMPREHENSIVE

accountability. Disclosure is not likely to diminish the central bank’s discretion/freedom
to decide on a case-by-case basis if liquidity support is provided, and in which form and
4.8.
4.9.
4.10.

Resolution
Financial Market
Infrastructures
Financial Integrity

under which conditions liquidity support is granted.
Selected principles from KA (see Annex).
Selected principles from PFMI (see Annex).
The central bank discloses the outcome of its Anti-Money Laundering/Countering the Financing of Terrorism
supervisory actions, as well as details about the oversight of its internal Anti-Money Laundering/Countering
the Financing of Terrorism controls.
The central bank
The central bankdiscloses the outcome of publishes the outcome of
its AML/CFT supervisory
its AML/CFT supervisory
actions.
activities annually,
including analysis (whereappropriate) of these
activities.

The central bankpublishes the outcomesof its internal AML/CFT
controls annually.

In addition to expanded
practices:
The central bankpublishes information
regarding theimplementation ofremedial actions as aresult of the supervisory
action.

In addition to expanded
practices:
The annual reportpublishes the findings ofan independent audit,

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The central bankdiscloses its internal
AML/CFT controls.

In addition to corepractices:
When sanctions are
imposed for breaches of
AML/CFT requirements,
information is publishedon the name of thefinancial institution, theenforcement actions
imposed, and a brief
description of thebreaches identified, whileallowing case-by-case
exceptions particularly
where publication
jeopardizes the stabilityof financial markets or an
on-going investigation.
In addition to corepractices:
The annual report on
AML/CFT controls
includes statistical

DIMENSION

4.11.

Consumer Protection

No.
5

DIMENSION

5.1.

Government

PRINCIPLE

There is clarity about theresults and implicationsof consumer protection
policies and operations,conducted solely or
jointly with otheragencies.

CORE

EXPANDED
information on thenumber of suspicioustransaction reports
submitted to thefinancial intelligence unit.

COMPREHENSIVE
preferably an
independent andreputable third party, ofthe effectiveness ofinternal AML/CFT
controls.

The central bank publishes an annual report on outcomes of its consumer
protection operations, including any appearances the central bank has madebefore designated public authority/authorities to report on such outcomes. This
includes statistics on measures taken by an ombudsman or other official
appointed to investigate consumer protection-related complaints (the central
bank may hold such an oversight function or cooperate with an agency that does).

PRINCIPLE

CORE

EXPANDEDCOMPREHENSIVEPILLAR V—OFFICIAL RELATIONS
The central bank discloses its relationship with the government. 12 This includes the exchange of information, thecoordination of policies, and financial aspects such as rules on profit distribution, clearly distinguishing the different roles
Selected principles fromand modalities this can take.

BCP, ICP, IOSCO, KA,
and PFMI(see Annex)
5.1.1.

12

The institutional
relationship between thecentral bank and thegovernment/its agencies

The central bank’s functions
with respect to thegovernment (and public
sector) and provisions

In addition to corepractices:
The central bank clearly
defines and discloses

In addition to expanded
practices:
The central bank discloses
the detailed terms andSection 5.1 covers the central bank’s cashier, depositary, fiscal agent, credit, advisory, debt management, and cooperation functions for the government(including ministries and other governmental agencies, such as tax and customs authorities) and other public sector institutions.

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5.1.2.

5.1.3.

CORE
describing their cooperation
are established in the legal
framework.
The central bank discloses
to the public, on a regularbasis, policies, instruments
used in interactions(including financialtransactions) between thecentral bank and thegovernment, and theoutcomes of suchinteractions.
The central bank discloses
on a regular basis
information about its
interactions withgovernmental agencies(e.g., with customs
authorities in the context
of information sharing)and the outcomes of suchinteractions. The relevant
legal framework,
instruments for sharing
responsibilities, anddelegated powers aredisclosed.

EXPANDED
procedures for the approvalandreporting/accountability on
the exercise of the central
bank’s functions withrespect to the government,
as well as the main terms
and conditions governing
those functions.

COMPREHENSIVE
conditions of the central
bank’s functions andpolicies with respect to thegovernment, as containedin a regulation or
agreement.

The legal framework
contains a clear
mechanism for theestablishment of theterms and conditions of
the central bank’s functions
with respect to thegovernment.

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5.1.4.

PRINCIPLE
is clearly defined andpublicly disclosed.
The central bank publicly
discloses its policies andterms and conditions
governing financialtransactions with thegovernment, including
its fiscal agent role, themanagement of thecurrent account, deposit
taking, advances,guarantees, loans andcredit arrangements tothe public sector, as well
as agency services
performed on behalf ofthe government.
The instruments used ininteraction (including thefinancial transactions)
between the central
bank and thegovernment/its agencies
are clearly defined andpublicly disclosed.
The central bankdiscloses publicly on aregular basis theoutcome of its
interaction (including
operations) with the

DIMENSION

PRINCIPLE
government/its agencies.

CORE

EXPANDEDCOMPREHENSIVE

5.2.

Domestic Financial
Agencies

The central bank discloses its relationships with domestic financial agencies as relevant to the pursuit of its mandate andthe execution of its functions.

Selected principles from
BCP, ICP, IOSCO, KA,
and PFMI (see Annex)

5.2.1.

5.2.2.

The relationship between
the central bank andrelevant domestic financial
agencies is clearly definedand publicly disclosed,
including cooperation and(co-) decision-making
modalities andarrangements for theformal/informal sharing of
information.
The policies andinstruments used in theinteraction of the central
bank with domestic
financial agencies, andthe outcome of theinteraction aretransparent.

The legal framework
contains provisions
establishing cooperation
between the central bankand domestic financial
regulatory and supervisory
authorities, as well as basic
terms and conditions witha view to information
sharing, coordination ofactivities, or any othercooperation arrangement.
The central bank discloses
the instruments used in
the interaction between
the central bank anddomestic financial

In addition to corepractices:
The central bank discloses
the detailed terms andconditions of cooperation
between the central bankand domestic financial
agencies.
The central bank discloses
the agreements withdomestic financial
agencies.

Similar to expanded
practices

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5.2.3.

Foreign Agencies
Selected principles fromCORE

EXPANDEDCOMPREHENSIVE

agencies.
The central bank discloses
regular reports on theinteraction between thecentral bank anddomestic financial
agencies.
With respect tomacroprudential policy andfinancial stability:

Insofar as the central
bank is part of aninteragency committee, it
discloses the provisions
governing such acommittee in regard to its
composition, therespective members’roles, the nature of thecooperation, and themechanism of thecooperation.
The central bank discloses its dealings with international organizations, foreign governments, other central
banks, and other relevant foreign agencies, including the nature of the involvement or interactions, and any
obligations and commitments that may arise from these relationships.

BCP, ICP, IOSCO, KA,
and PFMI (see Annex)
The central bank clearly
defines and discloses the

The legal framework
contains clear provisions

In addition to corepractices:

Similar to expanded
practices

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5.3.

PRINCIPLE
With respect to financial
stability, allarrangements to restore
or maintain financial
stability are clearly
disclosed, including
arrangements on data
sharing, liquidity
support, and who is
responsible for which
type of decision or
action at what stage.

DIMENSION

PRINCIPLE
relationship forexchange of informationand coordination ofactions/policies between
the central bank andinternationalorganizations, foreign
governments, othercentral banks, and otherrelevant foreign
agencies.
The central bankdiscloses its policies,
terms, and conditions
governing interaction
with these bodies.
The central bank clearly
defines and discloses
instruments used in theinteraction (including
financial transactions)
between the central
bank and these bodies.
The central bankdiscloses on a regularbasis the outcome of its

CORE
describing cooperation
between the central bankand foreign agencies, andthe basic terms andconditions of suchinteraction.

EXPANDED
The legal framework
contains detailed terms
and conditions ofcooperation between thecentral bank and foreign
agencies.

The central bank discloses
policies, cooperation, (co) decision-making
modalities, andarrangements for the(in)formal sharing of
information with foreign
agencies.

The central bank discloses
agreements with foreign
agencies.

The central bank discloses
the instruments used in
the interaction andfinancial transactions
between the central bankand foreign agencies.

The central bank discloses
information oninternational or bilateralrelations and (mandatory)
obligations arising fromsuch relations.

The central bank discloses
regular reports on theinteraction between thecentral bank and foreign
agencies.

relationship with these
5.4.

Other Relations

bodies.
The central bank discloses its involvement with private or semi-public institutions.

COMPREHENSIVE

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5.4.1.

PRINCIPLE
The central bankdiscloses its involvementwith private or (semi)
public institutions.

CORE

EXPANDEDCOMPREHENSIVE

The central bank discloses its investments in and ownership of subsidiaries, and joint
ventures with private, semi-public, or public entities.

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C. GLOSSARY
Definitions provided in the Glossary are used in the context of those parts of the Codethat are indicated at the end of each definition, if any. Otherwise, they are applicable
across the Code.
Audit committee (or similar financial matters oversight body): The primary purposeof a central bank's audit committee is to provide oversight of the financial reporting
process, the internal and external audit arrangements, and the central bank's system ofinternal controls. In general, such committees reflect the central bank legislation or
national context.
Autonomy: Central bank autonomy, which for the purposes of this Code issynonymous with “independence,” relates to four core aspects : (a) institutional
autonomy (the central bank’s ability to execute its mandate without any influence fromthird parties, including the government, also referred to as “operational autonomy”); (b)functional autonomy (the central bank’s ability to avail itself of all powers andinstruments to achieve its objective/s and to executive its functions (i.e., no third party
interference in central bank decisions exercising its mandate); (c) personal autonomy (security of tenure and fit and proper criteria of the members of a central bank’s
decision making body or bodies); and (d) financial autonomy (the capacity of a central
bank to adopt the necessary financial decisions to ensure that it has sufficient financial
resources to implement its mandate). Academic literature on central bank autonomy
also distinguishes between goal and instrument autonomy (i.e., the determination of acentral bank’s monetary policy goal, and the separate question of whether a central
bank is autonomous in implementing its goal).
Consumer Protection: Refers to tasks and matters relating to, inter alia, the disclosureof measures and transparency of financial institutions to the public, fair treatment ofcustomers of financial services and products, and business conduct, as well as dataprotection and privacy issues and dispute resolution mechanisms.
Corruption: The abuse of public office for private gain. According to the United
Nations Convention Against Corruption, corruption offenses include bribery,embezzlement and misappropriation or other diversion of property, trading in
influence, abuse of functions, illicit enrichment, and concealment.
Cross-Border Financial Flows and Foreign Exchange Administration Policy: Central
bank policy related to: (i) the regulation of cross border financial flows in foreign anddomestic currencies (sale/purchase, transfer, transmission and export/import of

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domestic and foreign currencies); (ii) licensing/authorization (or any other form of
approval) of foreign exchange activities (as a business), entities/individuals andindividual transactions; (iii) regulation of transactions in foreign currency within the
country; and (iv) regulation of transactions within the country in domestic currency
between residents and nonresidents and between non-residents. Transactions also
include those conducted by the central bank except transactions that are for foreignexchange interventions, foreign exchange reserve management purposes, and thoseunder Pillar V.
Decisions in individual cases: Decisions in different forms (such as decision,
license/approval etc.) which are applicable for individual cases (entities/individuals).
Such decisions are issued in the context of implementing the policy based on the
powers assigned to the central bank and do not include decisions that define or change
the policy. See also the definition of license/approval (see CBT 2.2., 3.2., and 4.2.).
Decision-making Bodies: These include, for instance, the board of directors, a council,
a supervisory board, committees, or any other governing body of the central bank,established by law or regulation.
Disclose (disclosed, publicly available, publicly disclosed, clearly disclosed):
Publication of the legal framework and policy decisions (regulatory framework) in
official gazettes and posting them on the central bank’s website. For otherdocuments/information, it means publication in printed or electronic mass media (e.g.,
newspapers, magazines, other official publications) as well as posting them on thecentral bank’s website. The legal framework, policy decisions, and otherdocuments/information should be easily accessible (see “Easily Accessible”).
Easily accessible: The general public and other users can easily find the legal
framework, policy decisions (regulatory framework), and other documents/information
navigating through the central bank’s website or other forms of widely usedcommunication (daily newspaper, etc.).
Emergency Liquidity Assistance (ELA): ELA encompasses both bilateral and marketwide liquidity support, usually to financial institutions. For bilateral support, it generally
takes the form of a collateralized lending operation. Market-wide liquidity support
can—besides collateralized lending—also take alternative forms, such as asset swaps oroutright purchases. Usually, such support is temporary, and therefore may build on, butdoes not necessarily form a permanent element of, the central bank’s monetary policy
instruments (see CBT 2.7., 3.8., and 4.7.).
Enforcement instruments: Instruments used by the central bank to enforce theregulatory framework and decisions in individual cases related to the policy on crossINTERNATIONAL MONETARY FUND

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border financial flows and foreign exchange administration, such as imposing different
sanctions (e.g., warnings, fines, license/approval suspension or withdrawal, etc.) for
noncompliance (see CBT 2.2., 3.2., and 4.2.).
Exchange of information: The rules specifying which types of information can beexchanged, how such information can be used, and the dissemination of informationexchanged.
Foreign Exchange Management: In the context of the CBT, the concept of Foreign
Exchange Management comprises all foreign exchange transactions—i.e., official
purchases or sales of foreign assets against domestic assets in the foreign exchange
market—by the central bank or the corresponding monetary authority, and other public
entities intervening on behalf of the monetary authority or the central government. This
includes transactions in both spot markets and with derivative instruments (see CBT
2.3., 3.3., and 4.3.).
Functions (tasks): The activities that the central bank undertakes to achieve its
objectives. In addition to the traditional function of monetary policy, central bank laws
and other relevant laws typically establish core functions that are often related to a
specific central bank objective (see CBT 1.2.).
Independence: (see Autonomy).
Legal Framework: Legal instruments governing the central bank, including theconstitution, relevant treaties, central bank law, and other relevant laws, such as
banking, insurance, securities, foreign exchange, AML/CFT, accounting, administrative,
procurement, employment, and corporate laws, or otherwise, as well as relevant
regulations and other applicable forms of legal instruments.
Legal protection: Protection of central bank decision-makers and staff, with particularreference to whether these individuals may be subject to legal suits or liability for any
adverse consequences of decisions made while conducting their official duties (see CBT1.1.).
Legal capacity: The central bank’s general legal capacity, in addition to its specificpowers to: (i) enter into contracts; (ii) institute legal proceedings and be subject to suchproceedings; and (iii) acquire, administer, and hold and dispose of movable andimmovable property. The legal instruments available to a central bank, including nonbinding instruments (recommendations) and legally binding instruments, irrespective ofwhether they are generally applicable or are addressed to specific legal or natural
persons (see CBT 1.1.).
Legal nature: Whether a central bank is a public institution subject to public law, an
institution established/subject to company/corporate law or is a sui generis institution.
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License/approval: License, authorization, approval, permit, or any other type ofdecision in individual cases by which the central bank grants the right to an entity or
individual to conduct foreign exchange activity/carry out the individual transaction(s) in
the foreign exchange area (e.g., license for the activity of the foreign exchange bureau,
approval to conduct cross border capital transaction(s), or approval to use the foreignexchange in some domestic transactions). Also see “Decisions in individual cases” (seeCBT 2.2., 3.2., and 4.2.).
Mandate: The clearly defined objectives, functions, and associated legal powers thatwill enable the central bank to implement its objectives (see CBT 1.2.).
Monetary Policy Collateral: Central banks require credit operations, i.e., the provisionof liquidity to their counterparties, to be secured by collateral. Thereby, the central bankaims to mitigate the risks associated with providing credit to banks and possibly
nonbank financial institutions. In addition, collateralized lending should improve theefficiency and effectiveness of the overall operational framework and transmission ofmonetary policy, as it allows the central bank to lend to all eligible counterparties at thesame rate, independent of their credit quality. This should also improve thetransparency and accountability of the central bank. Assets accepted as collateralshould be legally transferable to the central bank and usually take the form ofmarketable fixed income securities. In specific circumstances, including emergency loan
assistance, collateral may include equities, loans to the public or private sector(corporations or private households), and even real estate or commodities. Adequate
valuation and risk control measures will be necessary (see CBT 3.1.).
Monetary Policy Framework: The central bank’s goals and strategy, how it assesses
economic and financial conditions, and how it sets its policy instrument(s) to achieve its
objectives (see CBT 2.1.).
Monetary Policy Instruments: Instrument used by the central bank to conduct andimplement its monetary policy. These include, but are not limited to, Open Market
Operations, Standing Facilities, Reserve Requirements, and direct instruments ofmonetary control. Characteristics of instruments relate to, i.e., maturity, interest rate,
and auctioning method (see CBT 2.1. and 3.1).
Monetary Policy Operational Target: A variable that the central bank can control, to avery large extent, on a day-by-day basis, through the use of its monetary policy
instruments and that serves to communicate the stance of monetary policy to the
public (see CBT 3.1.).
Monitoring Instruments: Instruments established by the regulatory framework that areused by the central bank within the limits established by such a framework, to
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monitor/supervise the entities/individuals, transactions, or activities that are regulated,
licensed, or approved under the policy on cross-border financial flows and foreignexchange administration. These instruments include, but are not limited to, on-site andoff-site inspections (see CBT 2.2., 3.2., and 4.2.).
Objectives: The goals that the central bank aims to accomplish. It is a well-establishedpractice that central bank laws identify price stability—or a similar concept—as aprimary or one of the main objectives of the central bank. Many central banks may haveother objectives as part of their mandate, including economic (e.g., support of theeconomic policies of the government, full employment, economic growth, financial
inclusion, etc.), often subordinated to the price stability objective, and can also havefinancial stability (micro- and macro-prudential), financial integrity (relating to ensuring
compliance with AML/CFT aspects), and consumer protection objectives (see CBT 1.2.).
Personality and Legal Capacity: To enter into contracts, institute legal proceedings
and be subject to such proceedings, and acquire, administer, hold and dispose of
movable and immovable property (see CBT 1.1.).
Policy Decisions (regulatory framework): Decisions in different forms (such as laws,
decrees, directives, regulations, or instructions) that are applicable to an indefinite
number of identical situations by the central bank, public and private entities, andindividuals. Such decisions define the policy, resulting in new actions or changes to thepolicy, establish and change the rules, terms, and conditions for its implementation, andsanctions for noncompliance, with which authorized dealers (banks, etc.), other entities,
and individuals must comply.
Powers: The instruments at the disposal of a central bank to implement its functions.
These instruments can be of a private or public law nature. Note that central bank lawsalso commonly contain prohibitions that prevent the central bank from conducting
specific activities. In the interest of legal certainty, such prohibitions should be clearly
listed in the central bank law (see CBT 1.2.).
Prejudgment Attachment: A court ordering a seizure of specific property before a
judgment has been issued by the court.
Public Consultation: An exchange of views/opinions/proposals between
individuals/entities/other stakeholders and the central bank about a particular (draft)policy decision or regulatory change under consideration. As a result, both parties are
informed and can influence the policy decision.
Publicly Available: see “Disclose.”
Regulatory Framework: See “Policy Decisions.”

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Reserve Management Market Counterparties and Service Providers: Parties that are
official counterparts of the central bank for foreign exchange reserve management
purposes; this includes dealers and custodians (see CBT 3.4.).
Risk Exposure: The principal risks the central bank needs to take to meet its objectives.
Risk Framework: The process for identifying financial and nonfinancial risks, the overallrisk strategy, and the accompanying risk governance structure designed to effectively
monitor and evaluate the risk exposure. It also documents the roles and responsibilitiesof the stakeholders involved in the management of risks, including reporting lines andrequirements, and outlines key tools and methodologies for risk management.
Risk Governance Structure: The execution of the central bank’s risk strategy is
supported by a governance structure that promotes greater accountability andsegregation of responsibilities, as well as an adequate monitoring and reporting
mechanism. The governance structure includes the policies and procedures to supportand resource the risk management activities and should ensure that the risk
management function is staffed with adequate capacity. It should aim to strike abalance between ultimate responsibility and oversight at the Board level and ownershipat the operational level, including a risk management function. It also encompasses areporting structure to ensure timely communication of risk analysis and mitigation to
the Board and senior management, as well as an escalation process.
Risk Management Process: The process is composed of: (i) risk identification (theinventory and classification of all risks the central bank is exposed to); (ii) risk
assessment (the analysis and measurement of the identified risks); (iii) risk treatment(the selection and implementation of a risk mitigation strategy); and (iv) risk monitoring
and reporting (the mechanisms to continuously monitor and report risk exposures tothe relevant stakeholders).
Risk Statement: The risk exposure is typically expressed in a statement that specifies a
constraint or a desired outcome. It may be further articulated in a number ofmeasurable indicators, including thresholds and limits, to monitor the nature and rangeof risk management mitigation measures. Risk statements provide action plans andguide the central bank on what constitutes acceptable risk taking.
Risk Strategy: The risk management strategy, usually approved by the highest
governing body of the central bank, describes the high-level objectives and scope ofrisk management. It also defines the risk culture of the institution and is communicatedthrough a formal and concise umbrella document. The risk management strategy isfurther delineated in a set of specific policies and guidelines tailored to the central
bank’s circumstances, detailing the approach to the management of each type of risk.
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Security of Tenure: Security of tenure encompasses the eligibility (including fit andproper requirements) and disqualification criteria for the appointment of the membersof a central bank’s decision-making bodies, the appointment procedure, the dismissal
criteria and procedure, their remuneration, and the duration of their tenure.

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ANNEX I. SELECTED PRINCIPLES FROM INTERNATIONAL FINANCIAL
POLICY STANDARDS
Please note that the transparency-related principles listed in this Annex are for information purposes
only. The excerpts from relevant financial policy standards, as listed below, reflect selections by IMF
staff of relevant transparency related texts. Underlining is added to highlight key words or phrases.
By no means do these excerpts represent an interpretation, assessment, or guidance for the relevant
financial policy standards by the IMF, its Executive Board, its Management, or any of its staff oraffiliated agents. Any interpretation or guidance of this nature is the prerogative of the respective
international standard-setter.
1.

In microprudential supervision, resolution, and financial market infrastructures, theCentral Bank Transparency Code (CBT) relies on relevant international standards. These arethe:•Basel Committee on Banking Supervision’s (BCBS) Core Principles for Effective Banking
Supervision.

•

International Association of Insurance Supervisors’ (IAIS) Insurance Core Principles andCommon Framework for the Supervision of Internationally Active Insurance Groups.

•

International Organization of Securities Commissions’ (IOSCO) Objectives and Principles of
Securities Regulation.

•

Financial Stability Board’s (FSB) Key Attributes of Effective Resolution Regimes for Financial
Institutions.

•

Committee on Payments and Market Infrastructures and IOSCO’s (CPMI-IOSCO) Principles
for Financial Market Infrastructure.

The Annex presents selected principles from these international standards that relate totransparency. The Annex is not to be used for assessing compliance with the CBT and does notcontain a description of maturity of practices (e.g., core, expanded, or comprehensive) on
transparency of banking, insurance, securities sectors supervisors, resolution authorities, and FMI
overseers. The transparency issues presented in this Annex will not be assessed in the context of the
CBT, but rather by respective assessors in banking, insurance, securities, resolution, and financial
market infrastructure when they undertake assessments in their entirety or when preparing technicalnotes.
2.

The statement of principles and methodology differs in each of the standards:

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For banking, the Basel Core Principles (BCP) state the core principles, essential criteria, andadditional criteria. These are all contained in one BCBS document. The core principles are aframework of minimum standards for sound supervisory practices and are considered
universally applicable. “Essential criteria” are those elements that should be present in orderto demonstrate compliance with a Principle. “Additional criteria” may be particularly relevantto the supervision of more sophisticated banking organizations, and countries with suchinstitutions should aim to achieve them.

•

For insurance, Insurance Core Principles (ICP) include statements, standards, and guidance.
These are all contained in one IAIS document. “Principle statements” are the highest level in thehierarchy and set out the essential elements that must be present in a jurisdiction in order toprotect policyholders, promote the maintenance of fair, safe, and stable insurance markets, andcontribute to financial stability. “Standards” are the next level in the hierarchy. They set out key
high-level requirements that are fundamental to the implementation of the principle statement andshould be met for a jurisdiction to demonstrate observance with the particular Principle Statement.
“Guidance” is the lowest level in the hierarchy. They facilitate the understanding and application of
the principle statement or standards; they do not represent any requirements.

•

For securities, IOSCO sets out the Principles (P) in one document and the methodology in another.
The principles are based on three objectives: protecting investors; ensuring that markets are fair,efficient, and transparent; and reducing systemic risk. The methodology is designed to provide
IOSCO’s interpretation of principles and give guidance on the conduct of a self-assessment or thirdparty assessment of the level of principles implementation.

•

For resolution, the FSB’s Key Attributes (KA) set out the core elements that the FSB considers
to be necessary for an effective resolution regime. In addition, “Key Attributes Assessment
Methodology for the Banking Sector” sets out a methodology to guide the assessment of ajurisdiction’s compliance with the Key Attributes with respect to the banking sector. The
methodology proposes a set of essential criteria (EC) that should be used to assess compliance withthe relevant KA. The methodology includes explanatory notes (EN) that provide examples,
explanations, and cross-references to other relevant KAs, and specific definitions not included in thedefinitions of key terms.

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For financial market infrastructure (FMI), IOSCO’s Payments and Market Infrastructures
provides Principles (P) in one document and disclosure frameworks and assessment
methodology in another. The principles document has two sections. One defines therequirements to be met by the FMI related to safety, soundness, and efficiency. The otheraddresses the responsibilities and roles of the authorities that are regulating, supervising,and overseeing FMI.

3.

Additional information on the international standards can be found in the following websites:

Banking, Insurance, and Securities•“Key Standards for Sound Financial Systems; Financial Regulation and Supervision.” Financial Stability
Board, 2020. Available at https://www.fsb.org/work-of-the-fsb/about-the-compendium-ofstandards/key_standards/.

•“Core Principles for Effective Banking Supervision.” Basel Committee on Banking Supervision,
2012. Available at https://www.bis.org/publ/bcbs230.htm.

•“The Basel Framework.” Basel Committee on Banking Supervision, 2020. Available athttps://www.bis.org/basel_framework.

•“Insurance Core Principles and Common Framework for the Supervision of Internationally Active
Insurance Groups.” International Association of Insurance Supervisors, 2019. Available athttps://www.iaisweb.org/page/supervisory-material/comframe.

•“Objectives and Principles of Securities Regulation.” International Organization of Securities
Commissions, 2017. Available at https://www.iosco.org/library/pubdocs/pdf/IOSCOPD561.pdf.
“Methodology for assessing implementation of the IOSCO Objectives and Principles of Securities
Regulation.” International Organization of Securities Commissions, 2017. Available athttps://www.iosco.org/library/pubdocs/pdf/IOSCOPD562.pdf.

Resolution•“Key Attributes of Effective Resolution Regimes for Financial Institutions.” Financial Stability
Board, 2014. Available at https://www.fsb.org/2014/10/key-attributes-of-effective-resolutionregimes-for-financial-institutions-2

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“Key Attributes Assessment Methodology for the Banking Sector.” Financial Stability Board,
2016. Available at https://www.fsb.org/2016/10/key-attributes-assessment-methodology-forthe-banking-sector.

•“Public Disclosures on Resolution Planning and Resolvability - Discussion Paper for Public
Consultation.” Financial Stability Board, 2019. Available at https://www.fsb.org/2019/06/publicdisclosure-of-resolution-planning-and-resolvability-discussion-paper-for-public-consultation/.

•“Principles on Bail-in Execution.” Financial Stability Board, 2018. Available athttps://www.fsb.org/2018/06/principles-on-bail-in-execution-2/.

•“Recovery and Resolution Planning for Systemically Important Financial Institutions: Guidance on
Developing Effective Resolution Strategies.” Financial Stability Board, 2013. Available athttps://www.fsb.org/2013/07/r_130716b/.

Financial Market Infrastructure•“Principles for Financial Market Infrastructures (PFMI).” Committee on Payment andSettlement Systems and Technical Committee of the International Organization of Securities
Commissions (CPMI-IOSCO). 2012. Available athttps://www.iosco.org/library/pubdocs/pdf/IOSCOPD377-PFMI.pdf.

Financial Sector Assessment•

Financial Sector Assessment Program, IMF/World Bank, 2020. Available athttps://www.imf.org/external/np/fsap/fssa.aspx.

A. Banking, Insurance, and Securities
EC = Essential Criteria.
EN = Explanatory Notes.
PILLAR I—Transparency in Governance
Legal framework,
BCBS Core Principles for Effective Banking Supervision
Mandate,Legal protection
BCP1 Responsibilities, objectives and powers
An effective system of banking supervision has clear responsibilities andobjectives for each authority involved in the supervision of banks andbanking groups. A suitable legal framework for banking supervision is in

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place to provide each responsible authority with the necessary legal powers
to authorize banks, conduct ongoing supervision, address compliance withlaws and undertake timely corrective actions to address safety andsoundness concerns.
BCP1 EC1 The responsibilities and objectives of each of the authorities
involved in banking supervision are clearly defined in legislation and publicly
disclosed. Where more than one authority is responsible for supervising thebanking system, a credible and publicly available framework is in place to
avoid regulatory and supervisory gaps.
BCP2 Independence, accountability, resourcing and legal protection forsupervisors
The supervisor possesses operational independence, transparent processes,
sound governance, budgetary processes that do not undermine autonomy
and adequate resources and is accountable for the discharge of its duties
and use of its resources. The legal framework for banking supervision
includes legal protection for the supervisor.
BCP2 EC9 Laws provide protection to the supervisor and its staff against
lawsuits for actions taken or omissions made while discharging their duties
in good faith. The supervisor and its staff are adequately protected against
the costs of defending their actions or omissions made while discharging
their duties in good faith.
IAIS Insurance Core Principles
ICP1 Objectives, Powers and Responsibilities of the Supervisor
Each authority responsible for insurance supervision, its powers and theobjectives of insurance supervision are clearly defined.
ICP1.0.1. Publicly defined objectives foster transparency. Based on this,government, legislatures and other stakeholders, including insurance
industry participants and consumers, can form expectations about
insurance supervision and assess how well the supervisor is achieving its
objectives and fulfilling its responsibilities.
ICP1.1. Primary legislation clearly defines the authority (or authorities)
responsible for insurance supervision.

ICP1.2. Primary legislation clearly determines the objectives of insurance
supervision and these include at least to:•protect policyholders•
promote the maintenance of a fair, safe and stable insurance market•
contribute to financial stability.

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ICP1.3. Primary legislation gives the supervisor adequate powers to meet its
responsibilities and objectives.
ICP2 Supervisor
The supervisor is operationally independent, accountable and transparent
in the exercise of its responsibilities and powers and has adequate
resources to discharge its responsibilities.
ICP2.0.1. Operationally independence, accountability and transparency by
the supervisor contribute to the legitimacy and credibility of the supervisory
process.
ICP2.0.4. Transparency reinforces accountability. Transparency increases thepredictability of supervision and shapes the expectations of supervised
entities, which enhances supervisory effectiveness. For these reasons,supervisory requirements, supervisory processes as well as information
about the supervisor’s responsibilities should be publicly disclosed, in amanner consistent with any confidentiality requirements imposed on the
supervisor.
ICP2.2. Legislation governing the supervisor provides the necessary legal
protection from legal action against the supervisor and its staff for actions
taken in good faith while discharging their duties. In addition, thesupervisor’s staff is adequately protected against the costs of defending
their actions.

IOSCO Objectives and Principles of Securities Regulation
A. Principles Relating to the Regulator
P1 The responsibilities of the Regulator should be clear and objectively stated.
P1 (Methodology/Key issues): Responsibilities of the Regulator should be clear
and objectively stated, preferably in law.

Autonomy

P3 The Regulator should have adequate powers, proper resources and thecapacity to perform its functions and exercise its powers.
BCBS Core Principles for Effective Banking Supervision
BCP2 Independence, accountability, resourcing and legal protection forsupervisors
BCP2 EC1 The operational independence, accountability and governance ofthe supervisor are prescribed in legislation and publicly disclosed. There isno government or industry interference that compromises the operational

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independence of the supervisor. The supervisor has full discretion to takeany supervisory actions or decisions on banks and banking groups under its
supervision.
BCP2 EC2 The process for the appointment and removal of the head(s) of
the supervisory authority and members of its governing body istransparent. The head(s) of the supervisory authority is (are) appointed for aminimum term and is removed from office during his/her term only forreasons specified in law or if (s)he is not physically or mentally capable ofcarrying out the role or has been found guilty of misconduct. The reason(s)for removal is publicly disclosed.
BCP2 EC6 The supervisor has adequate resources for the conduct ofeffective supervision and oversight. It is financed in a manner that does notundermine its autonomy or operational independence.
IAIS Insurance Core Principles
ICP2 Supervisor
ICP2.1. The supervisor is operationally independent and free from undue
government or industry interference that compromises that independence.
ICP2.1.1. Operational independence of the supervisor includes having thediscretion to allocate its resources, including financial and human resources,
and to carry out the supervisory process in accordance with its objectives
and the risks the supervisor perceives. Having this discretion, which
underpins operational independence, should be recognized in primarylegislation.
ICP2.1.2. The supervisor should be financed in a manner that does notundermine its independence. A wide variety of financing models exist, suchas financing by government, levies imposed on supervised entities andcombinations thereof. To help ensure the supervisor’s independence is notcompromised, the method in which it is financed should be stable,
predictable and transparent, and prevent interference from its funding
source.
ICP2.1.3. The institutional relationships and accountability frameworks
between the supervisor and the government should be clearly defined inlegislation.

ICP2.1.5. The legislation should define the responsibilities of the governing
body. In cases where there are industry representatives or elected officials or
government employees on the governing body of the supervisor, the

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composition of the governing body should be sufficiently diverse to prevent
such representatives from controlling the supervisor.
ICP2.3. Procedures regarding the appointment and dismissal of the head of
the supervisor and members of its governing body (if such a governing body
exists) are transparent.
ICP2.3.1. Public procedures regarding the appointment and dismissal of thehead of the supervisor enhance independence, as they limit the potential forgovernment interference in the management of the supervisor. Those
procedures should be codified in legislation.
ICP2.3.2. Those procedures should disclose, for example, who appoints thehead of the supervisor and members of the governing body, the length of
those appointments and the reasons for which the head of the supervisor or
members of the governing body can be dismissed before the end of theirterm, if applicable.
ICP2.3.3. Legislation should disclose the general criteria for appointing
members of a governing body, including that they possess relevant
qualifications, knowledge and experience to oversee the activities of thesupervisor, as well as the mechanism for their remuneration (for example,
salary, daily allowance or voluntary work). The procedures regarding theappointment of the members of the governing body should result in a balanceof skills, knowledge and experience amongst the members of the governing
body as a whole.
IOSCO Objectives and Principles of Securities Regulation
A. Principles Relating to the Regulator

Decision-making
arrangement

P2 The Regulator should be operationally independent and accountable in theexercise of its functions and powers.
BCBS Core Principles for Effective Banking Supervision
BCP2 Independence, accountability, resourcing and legal protection forsupervisors

Communication,
Confidentiality

BCP2 EC1 The operational independence, accountability and governance ofthe supervisor are prescribed in legislation and publicly disclosed.
BCBS Core Principles for Effective Banking Supervision
BCP3 Cooperation and collaboration
Laws, regulations or other arrangements provide a framework forcooperation and collaboration with relevant domestic authorities and

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foreign supervisors. These arrangements reflect the need to protect
confidential information.
IAIS Insurance Core Principles
ICP2 Supervisor
ICP2.0.4. Transparency reinforces accountability. Transparency increases thepredictability of supervision and shapes the expectations of supervised
entities, which enhances supervisory effectiveness. For these reasons,supervisory requirements, supervisory processes as well as information
about the supervisor’s responsibilities should be publicly disclosed, in amanner consistent with any confidentiality requirements imposed on the
supervisor.
ICP2.7. The supervisor, including its staff and any third party acting on its
behalf (presently or in the past), are required by legislation to protect
confidential information in the possession of the supervisor.
ICP2.8.1. Transparency reinforces accountability of supervisors. The
supervisor should publish information about itself and the insurance sector,
including:[…] supervisory measures taken in relation to problem or failed insurers,
subject to confidentiality considerations and in so far as it does notjeopardize other supervisory objectives or prejudice another case pending
before the supervisor.

IOSCO Objectives and Principles of Securities Regulation
A. Principles Relating to the Regulator
P2: The confidential and commercially sensitive nature of much of theinformation in the possession of the regulator must be respected. Safeguards
must be in place to protect such information from inappropriate use or
disclosure.
PILLAR II—Transparency in Policies
BCBS Core Principles for Effective Banking Supervision
BCP1 Responsibilities, objectives and powers
BCP1 EC4 Banking laws, regulations and prudential standards are updated
as necessary to ensure that they remain effective and relevant to changing
industry and regulatory practices. These are subject to public consultation,
as appropriate.

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BCP2 Independence, accountability, resourcing and legal protection forsupervisors
The supervisor possesses operational independence, transparent processes,
sound governance, budgetary processes that do not undermine autonomy
and adequate resources and is accountable for the discharge of its duties
and use of its resources.
BCP5 Licensing criteria
BCP5 EC2 Laws or regulations give the licensing authority the power to set
criteria for licensing banks.
IAIS Insurance Core Principles
ICP2 Supervisor
ICP2.9. The supervisor publishes its requirements, policies and supervisory
procedures. The supervisor consults publicly on significant changes that it
makes to requirements, policies and supervisory procedures.
ICP2.9.1. The supervisor publishes and regularly reviews requirements,
policies and supervisory procedures to ensure they remain appropriate forthe characteristics of the industry, emerging risks and evolving international
standards. Some requirements may be contained in primary legislation,
while others may be contained in instruments issued by the supervisor,such as guidance and industry advice. The supervisor should ensure these
instruments are made available to the public, for example on the
supervisor’s website.
ICP2.9.2. A critical element of transparency is for the supervisor to provide
the opportunity for meaningful public consultation on proposed
requirements and supervisory procedures. Meaningful public consultation
benefits from participation by a diversity of stakeholders. Consequently, thesupervisor should have methods in place to encourage and solicit
stakeholder participation.
ICP2.9.4. In some jurisdictions, the development and issuance of
requirements may be outside of the control of the supervisor; for example,
the power to enact legislation may be vested in another government bodyor supranational bodies that have a direct role in the legislation in force intheir member countries. In such cases, the consultation process may also beoutside the remit of the supervisor. To the extent possible, the supervisor
should be involved in the development of the requirements, for example,
by participating in consultations, and the supervisor should keep the public
and the industry informed of proposed changes.

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A. Principles relating to the Regulator
P4 The Regulator should adopt clear and consistent regulatory process.
P4: In exercising its powers and discharging its functions, the regulator should
adopt processes, which are:•consistently applied•comprehensible•
transparent to the public•
fair and equitable.
In the formulation of policy, the regulator should:•
have a process for consulting with the public including those who may beaffected by the policy•
publicly disclose its policies in important operational areas; etc.

PILLAR III—Transparency in Operations
Instruments (tools) BCBS Core Principles for Effective Banking Supervision

BCP1 Responsibilities, objectives and powers
BCP1 EC6 When, in a supervisor’s judgment, a bank is not complying with laws
or regulations, or it is or is likely to be engaging in unsafe or unsound practices
or actions that have the potential to jeopardize the bank or the banking
system, the supervisor has the power to:(a) take (or require a bank to take) timely corrective action(b) impose a range of sanctions(c) revoke the bank’s license(d) cooperate and collaborate with relevant authorities to achieve an orderly
resolution of the bank, including triggering resolution where appropriate.
IAIS Insurance Core Principles
ICP2 Supervisor
ICP2.8.1. Transparency reinforces accountability of supervisors. The
supervisor should publish information about itself and the insurance sector,
including:•
its objectives and responsibilities•
its goals and priorities for the future•
its activities in light of its goals and priorities in the previous year•
its resources, including human, technological and financial•
data and analysis about the state of the insurance sector•
supervisory measures taken in relation to problem or failed insurers,
subject to confidentiality considerations and in so far as it does not jeopardize
other supervisory objectives or prejudice another case pending before thesupervisor.

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ICP4 Licensing

A legal entity which intends to engage in insurance activities must be licensed
before it can operate within a jurisdiction. The requirements and procedures
for licensing must be clear, objective and public, and be consistently applied.
ICP10 Preventive Measures, Corrective Measures and Sanctions
The supervisor:•requires and enforces preventive and corrective measures•
imposes sanctions
which are timely, necessary to achieve the objectives of insurance
supervision, and based on clear, objective, consistent, and publicly
disclosed general criteria.

Coverage

ICP10.0.4. […] In addition to general criteria, other parts of the framework
on preventive measures, corrective measures and sanctions can also be
released publicly, particularly where the supervisor feels that this additionaltransparency will lead to the market functioning more effectively.
BCBS Core Principles for Effective Banking Supervision
BCP4 Permissible activities
BCP4 EC5 The supervisor or licensing authority publishes or otherwise
makes available a current list of licensed banks, including branches offoreign banks, operating within its jurisdiction in a way that is easily
accessible to the public.
IAIS Insurance Core Principles

ICP4 Licensing
ICP4.7. The supervisor publishes a complete list of licensed insurance legal
entities and the scope of the licenses granted.
ICP4.7.1. The supervisor should publish the complete list of licensed insurance
legal entities and clearly state the scope of license that has been granted toeach insurance legal entity. This would provide clarity to the public as towhich entities are licensed for specific classes of business.
ICP4.7.2. If the conditions or restrictions to the license would impact the
public or any person dealing with the insurance legal entity, the supervisor
should either publish these conditions or restrictions or require the insurance
legal entity to disclose these conditions or restrictions accordingly. Conditions
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Accesslines or classes of insurance business an insurance legal entity is permitted to
conduct.
BCBS Core Principles for Effective Banking Supervision
BCP28 Disclosure and transparency
BCP28 EC5 The supervisor or other relevant bodies regularly publishes
information on the banking system in aggregate to facilitate public
understanding of the banking system and the exercise of market discipline.
IAIS Insurance Core Principles
ICP2 Supervisor
ICP2.8.1. Transparency reinforces accountability of supervisors. The
supervisor should publish information about itself and the insurance sector,
including:•
its objectives and responsibilities•
its goals and priorities for the future•
its activities in light of its goals and priorities in the previous year•
its resources, including human, technological and financial•
data and analysis about the state of the insurance sector•
supervisory measures taken in relation to problem or failed insurers,
subject to confidentiality considerations and in so far as it does not jeopardize
other supervisory objectives or prejudice another case pending before thesupervisor.

ICP24 Macroprudential Supervision
ICP24.5. The supervisor publishes relevant data and statistics on theinsurance sector.
ICP24.5.1. The publication of data and statistics by the supervisor may
enhance market efficiency by allowing market participants to make more
informed decisions and reducing the cost to the public of acquiring
insurance sector information. Moreover, the publication of data may serve
as a market disciplining mechanism by facilitating comparisons of anindividual insurer to the sector as a whole.

ICP24.5.2. The supervisor may provide access to sufficiently detailed data
either by publishing data itself or by providing others with adequate meansfor publishing data. This could be achieved by engaging a government
statistical office or cooperating with the local insurance sector; provided thesupervisor is satisfied with the accuracy, completeness, frequency andtimeliness of such publication.
PILLAR IV—Transparency in Outcome

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BCP2 Independence, accountability, resourcing and legal protection forsupervisors
BCP2 EC1 The operational independence, accountability and governance ofthe supervisor are prescribed in legislation in legislation and publicly
disclosed.
BCP2 EC3 The supervisor publishes its objectives and is accountablethrough a transparent framework for the discharge of its duties in relation
to those objectives.
IAIS Insurance Core Principles
ICP2 Supervisor
ICP2.8. The supervisor is transparent to the public, supervised entities andthe government about how it exercises its responsibilities.
ICP2.8.1. Transparency reinforces accountability of supervisors. The
supervisor should publish information about itself and the insurance sector,
including:•
its objectives and responsibilities•
its goals and priorities for the future•
its activities in light of its goals and priorities in the previous year•
its resources, including human, technological and financial•
data and analysis about the state of the insurance sector; and•supervisory measures taken in relation to problem or failed insurers,
subject to confidentiality considerations and in so far as it does not jeopardize
other supervisory objectives or prejudice another case pending before thesupervisor.

ICP2.8.2. The supervisor should seek to publish a report at least annuallythat contains the elements listed above as well as its audited financial
statements. This type of report is a key document by which a supervisor
accounts to its stakeholders.

IOSCO Objectives and Principles of Securities Regulation
A. Principles relating to the Regulator
P2 The Regulator should be operationally independent and accountable in theexercise of its functions and powers.
P2: Accountability implies that the regulator is subject to appropriate scrutiny
and review, including:

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periodic public reporting by the regulator on its performance•transparency in the regulator’s process and conduct.
PILLAR V—Transparency in Official relations
Government
IAIS Insurance Core Principles
ICP2 Supervisor

Domestic/foreign
agencies

ICP2.1.3. The institutional relationships and accountability frameworks
between the supervisor and the government should be clearly defined inlegislation. It is important to specify the circumstances and processes forsharing information, consultation or approval between the supervisor andthe government. This may include establishing what information should be
provided, how each entity should consult on matters of mutual interest andwhen approval from relevant authorities is necessary. The daily operationsof the supervisor should not be subject to consultation with or approval by
the government. In exceptional circumstances, the supervisor may choose
to consult with the government in relation to a supervisory decision where
there are major socio-economic implications of that decision.
BCBS Core Principles for Effective Banking Supervision
BCP3 Cooperation and collaboration
Laws, regulations or other arrangements provide a framework forcooperation and collaboration with relevant domestic authorities andforeign supervisors. These arrangements reflect the need to protect
confidential information.
IAIS Insurance Core Principles
ICP25 Supervisory Cooperation and Coordination
The supervisor cooperates and coordinates with involved supervisors andrelevant authorities to ensure effective supervision of insurers operating on across-border basis.

IOSCO Objectives and Principles of Securities Regulation
D. Principles for Cooperation in Regulation¶14. Regulators should establish information sharing mechanisms that set out
when and how they will share both public and non-public information with
their domestic and foreign counterparts.

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B. Resolution
PILLAR I—Transparency in Governance
Legal framework, KA 2 Resolution authority
Mandate2.1 […] Where there are multiple resolution authorities within a jurisdiction
their respective mandates, roles and responsibilities should be clearly definedand coordinated.
2.2 Where different resolution authorities are in charge of resolving entitiesof the same group within a single jurisdiction, the resolution regime of thatjurisdiction should identify a lead authority that coordinates the resolution of
the legal entities within that jurisdiction.
EC2.1 The legal framework clearly identifies one or more resolution authorities
and provides it or them with a clear mandate. Where there are multiple
resolution authorities or where multiple authorities are involved in a resolution
process, the resolution regime provides for the identification of a leadauthority; sets out clear arrangements to coordinate the resolution of affiliatedlegal entities, or the resolution of a single bank, within that jurisdiction; andprovides for a clear allocation of objectives, functions and powers of thoseauthorities.
2.3 As part of its statutory objectives and functions, and where appropriate incoordination with other authorities, the resolution authority should: [notshown]
2.6. The resolution authority and its staff should be protected against liability
for actions taken and omissions made while discharging their duties in theexercise of resolution powers in good faith, including actions in support offoreign resolution proceedings.
EC2.6 The legal framework provides legal protection through statute for the
resolution authority, its head, members of the governing body and its staff andany agents against liability for actions taken or omissions made while
discharging their duties in good faith and acting within the scope of theirpowers, including actions taken in support of foreign resolution proceedings;
including indemnification against any costs of defending any such actions.
KA 3 Resolution powers
3.2 Resolution authorities should have at their disposal a broad range ofresolution powers, which should include powers to do the following: [notshown]

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AutonomyEN3(e) Powers of the resolution authority—Where the EC refer to powers of theresolution authority to take specific resolution actions, those powers should beclearly set out in the legal framework applicable to the authority.
KA 2 Resolution authority
2.5 The resolution authority should have operational independence
consistent with its statutory responsibilities, transparent processes, soundgovernance and adequate resources and be subject to rigorous evaluation
and accountability mechanisms to assess the effectiveness of any resolution
measures. It should have the expertise, resources and the operational
capacity to implement resolution measures with respect to large andcomplex firms.
EC2.3 The resolution authority is, by law and in practice, operationallyindependent in the performance of its statutory responsibilities.

EN2(d) Operational Independence[…] Appropriate safeguards could include transparent appointment procedures;statutory constraints that would prevent the head of the resolution authority
being removed during his or her term of office for reasons other than thosespecified in law; and public disclosure of the reason(s) for that early dismissal.
Decision making
KA 2 Resolution authority
arrangement
EC2.4 The resolution authority is accountable through a transparent
framework for the discharge of its duties in relation to its statutory
responsibilities.
Communication
KA 7 Legal framework conditions for cross-border cooperation(confidentiality)
7.6 The resolution authority should have the capacity in law, subject toadequate confidentiality requirements and protections for sensitive data, toshare information […]PILLAR II—Transparency in Policies
KA 2 Resolution authority
2.5 The resolution authority should have operational independence
consistent with its statutory responsibilities, transparent processes, soundgovernance and adequate resources and be subject to rigorous evaluation
and accountability mechanisms to assess the effectiveness of any resolution
measures.
EC2.4 The resolution authority is accountable through a transparent
framework for the discharge of its duties in relation to its statutory
responsibilities.
KA 3 Resolution powers
3.1 […] There should be clear standards or suitable indicators of non-viability
to help guide decisions on whether firms meet the conditions for entry into
resolution.

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EC3.1 The legal framework includes clear criteria that provide for timely andearly entry into resolution before a bank is balance sheet insolvent, when abank is no longer viable or when it is likely to be no longer viable and, in either
case, has no reasonable prospect of return to viability.
EN3(c) Quantitative or qualitative criteria to assess non-viability the conditions
for entry into resolution or exercise of resolution powers should be clear andtransparent and set out in law:
PILLAR III—Transparency in Operations
Instruments
KA 3 Resolution powers(tools)3.2 Resolution authorities should have at their disposal a broad range ofresolution powers, which should include powers to do the following: [notshown]
EN3(f)(iii) Exercisable without shareholder or creditor consent–[…] In order toensure legal certainty and transparency to shareholders and creditors, thepowers to override any requirement for consent should be clear.
EN3(r) Regulatory requirements for bridge institutions—The legal framework
should be transparent as to what capital and other regulatory requirements, ifany, will apply to bridge institutions.
KA 4 Set-off, netting, collateralization, segregation of client assets
4.1 The legal framework governing set-off rights, contractual netting andcollateralization agreements and the segregation of client assets should beclear, transparent and enforceable during a crisis or resolution of firms, andshould not hamper the effective implementation of resolution measures.
EN4(a) Prohibition or Temporary stay of early termination rights— […] Where
the legal framework includes both kinds of provision, it should be clear inadvance, for any type of such contract, which provision would apply to thoseearly termination rights in a resolution of the financial institution under thedomestic regime.
KA 5 Safeguards
5.1 Resolution powers should be exercised in a way that respects thehierarchy of claims while providing flexibility to depart from the generalprinciple of equal (pari passu) treatment of creditors of the same class, withtransparency about the reasons for such departures, if necessary to containthe potential systemic impact of a firm’s failure or to maximize the value forthe benefit of all creditors as a whole.
KA 6 Funding of firms in resolution
EN6(b) Use of deposit insurance funds for resolution—Where a deposit
insurance fund can be used in resolution, there should be transparent rules and

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policies on the use of such funds, including clarity on the extent of thecontribution that may be made.
KA 7 Legal framework conditions for cross-border cooperation
7.4 […] The treatment of creditors and ranking in insolvency should betransparent and properly disclosed to depositors, insurance policy holders
and other creditors.

Coverage

Access

7.5 Jurisdictions should provide for transparent and expedited processes togive effect to foreign resolution measures, either by way of a mutual
recognition process or by taking measures under the domestic resolution
regime that support and are consistent with the resolution measures takenby the foreign home resolution authority.
KA 1 Scope
1.1 The regime should be clear and transparent as to the financial institutions(hereinafter “firms”) within its scope.
EC1.1 The scope of application of the resolution regime and the circumstancesin which it applies are clearly defined in the legal framework.
KA 2 Resolution authority
2.7 The resolution authority should have unimpeded access to firms wherethat is material for the purposes of resolution planning and the preparationand implementation of resolution measures.

EC2.7 Under the legal framework, the resolution authority has unimpeded
access to the domestic premises of banks where necessary for the purposes ofresolution planning and the preparation and implementation of resolution
measures.
PILLAR IV—Transparency in Outcome
KA 2 Resolution authority
2.5 The resolution authority should have operational independence
consistent with its statutory responsibilities, transparent processes, soundgovernance and adequate resources and be subject to rigorous evaluation
and accountability mechanisms to assess the effectiveness of any resolution
measures.
EC2.4 The resolution authority is accountable through a transparent
framework for the discharge of its duties in relation to its statutory
responsibilities. This framework includes procedures for reviewing andevaluating actions that the resolution authority takes in carrying out its
statutory responsibilities, and the periodic publication of reports on its
resolution actions and policies, as necessary.
EN2(e) Accountability
The requirement for procedures for reviewing and evaluating actions that theresolution authority takes in carrying out its statutory responsibilities may be

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satisfied by procedures for internal review by management or a function within
the resolution authority. Provision for review of the effectiveness of theresolution authority in meeting its statutory objectives by an appropriate
external body would strengthen accountability. The resolution authority should
also publish periodic reports on its resolution actions and policies relating to its
mandate and its statutory objectives at sufficiently frequent intervals to keep
stakeholders and the public adequately informed about the authority’s
resolution activities. Public reports may include case-specific reports that are
released once the resolution of a bank has concluded, assessing the outcome of
the resolution and the effectiveness with which the resolution was carried out
by reference to the statutory objectives. The resolution authority should
however not be required to disclose publicly the operational resolution plans or
results of resolvability assessments of individual banks.
PILLAR V—Transparency in Official Relations
Domestic
KA 2 Resolution authority
coordination
2.1 […] Where there are multiple resolution authorities within a jurisdiction
their respective mandates, roles and responsibilities should be clearly definedand coordinated.
EC2.1 The legal framework clearly identifies one or more resolution authorities
and provides it or them with a clear mandate. Where there are multiple
resolution authorities or where multiple authorities are involved in a resolution
process, the resolution regime provides for the identification of a leadauthority; sets out clear arrangements to coordinate the resolution of affiliatedlegal entities, or the resolution of a single bank, within that jurisdiction; andprovides for a clear allocation of objectives, functions and powers of thoseauthorities.

International
coordination

2.2 Where different resolution authorities are in charge of resolving entitiesof the same group within a single jurisdiction, the resolution regime of thatjurisdiction should identify a lead authority that coordinates the resolution of
the legal entities within that jurisdiction.
KA 9 Institution-specific cross-border cooperation agreements
9.2 The existence of agreements should be made public. The homeauthorities may publish the broad structure of the agreements, if agreed by
the authorities that are party to the agreement.

C. Financial Market Infrastructures
PILLAR II—Transparency in Policies
Responsibility C: Disclosure of Policies with Respect to FMIs
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Decision-making
process

Central banks, market regulators, and other relevant authorities should clearly
define and disclose their regulatory, supervisory, and oversight policies withrespect to FMIs.
Key considerations
1. Authorities should clearly define their policies with respect to FMIs, which
include the authorities’ objectives, roles, and regulations.
2. Authorities should publicly disclose their relevant policies with respect tothe regulation, supervision, and oversight of FMIs.

Explanatory note
P4.3.2. Authorities should publicly disclose their relevant policies with respect
to the regulation, supervision, and oversight of FMIs, as public disclosure
promotes consistent policies. Such disclosure typically involves
communicating the authorities’ regulatory, supervisory, and oversightstandards for FMIs and helps to establish clear expectations and facilitate
compliance with those standards. Furthermore, disclosing policies publicly
communicates the responsibilities and expectations of authorities to thewider public and thereby promotes the accountability of those authorities.
Authorities can publicly disclose their policies in a variety of forms, including
plain-language documents, policy statements, and relevant supporting
material. Such materials should be readily available.
PILLAR III—Transparency in Operations
Instruments(supervisory
tools)

Responsibility A: Regulation, Supervision, and Oversight of FMIs
FMIs should be subject to appropriate and effective regulation, supervision,and oversight by a central bank, market regulator, or other relevant authority.
Key considerations
1. Authorities should clearly define and publicly disclose the criteria used to
identify FMIs that should be subject to regulation, supervision, and oversight.

Explanatory note
P4.1.2. Authorities should clearly define and publicly disclose the criteria used
to identify FMIs that should be subject to regulation, supervision, andoversight. The precise framework for making such decisions may vary acrossjurisdictions. In some countries, for example, there is a statutory framework,
while in others, the central bank or other relevant authorities have greater
discretion to set the criteria use. A basic criterion, however, is the function of
the FMI. Systemically important payment systems, CSDs, SSSs, CCPs, and TRs

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are typically subject to regulation, supervision, and oversight because of thecritical role that they play in the financial system.
Authorities should publicly disclose their relevant policies with respect to theregulation, supervision, and oversight of FMIs, as public disclosure promotes
consistent policies. Such disclosure typically involves communicating theauthorities’ regulatory, supervisory, and oversight standards for FMIs andhelps to establish clear expectations and facilitate compliance with thosestandards. Furthermore, disclosing policies publicly communicates the
responsibilities and expectations of authorities to the wider public andthereby promotes the accountability of those authorities. Authorities canpublicly disclose their policies in a variety of forms, including plain-language
documents, policy statements, and relevant supporting material. Suchmaterials should be readily available.
Coverage

Responsibility D: Application of the Principles for FMIs
Central banks, market regulators, and other relevant authorities should adopt
the CPSS-IOSCO Principles for financial market infrastructures and apply themconsistently.
Key considerations
1. Authorities should adopt the CPSS-IOSCO Principles for financial market
infrastructures.
2. Authorities should ensure that these principles are, at a minimum, applied toall systemically important payment systems, CSDs, SSSs, CCPs, and TRs.
3. Authorities should apply these principles consistently within and acrossjurisdictions, including across borders, and to each type of FMI covered by theprinciples.
Explanatory note
P4.4.1. Central banks, market regulators, and other relevant authorities
should adopt the CPSS-IOSCO Principles for financial market infrastructures.
The adoption and application of these principles can greatly enhance
regulatory, supervisory, and oversight efforts by relevant authorities andsupport the establishment of important minimum standards for risk
management. While the precise means through which the principles areapplied will vary from jurisdiction to jurisdiction, all CPSS and IOSCO
members are expected to apply the principles to the relevant FMIs in theirjurisdictions to the fullest extent allowed by the legal framework in theirjurisdiction.
1.0. Introduction

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General applicability of the principles
P1.20. The presumption is that all CSDs, SSSs, CCPs, and TRs are systemicallyimportant, at least in the jurisdiction where they are located, typicallybecause of their critical roles in the markets they serve. If an authority
determines that a CSD, SSS, CCP or TR in its jurisdiction is not systemicallyimportant and, therefore, not subject to the principles, the authority should
disclose the name of the FMI and a clear and comprehensive rationale for thedetermination. Conversely, an authority may disclose the criteria used to
identify which FMIs are considered as systemically important and may
disclose which FMIs it regards as systemically important against these criteria.
These principles are designed to apply to domestic, cross-border, andmulticurrency FMIs.
PILLAR V—Transparency in Official Relations
Internal
coordination

Responsibility E: Cooperation with Other Authorities

Central banks, market regulators, and other relevant authorities should
cooperate with each other, both domestically and internationally, as
appropriate, in promoting the safety and efficiency of FMIs.
Key considerations
1. Relevant authorities should cooperate with each other, both domesticallyand internationally, to foster efficient and effective communication andconsultation in order to support each other in fulfilling their respective
mandates with respect to FMIs. Such cooperation needs to be effective innormal circumstances and should be adequately flexible to facilitate effective
communication, consultation, or coordination, as appropriate, during periods ofmarket stress, crisis situations, and the potential recovery, wind-down, or
resolution of an FMI.
2. If an authority has identified an actual or proposed operation of a crossborder or multicurrency FMI in its jurisdiction, the authority should, as soon
as it is practicable, inform other relevant authorities that may have an interestin the FMI’s observance of the CPSS-IOSCO Principles for financial market
infrastructures.

3. Cooperation may take a variety of forms. The form, degree of formalizationand intensity of cooperation should promote the efficiency and effectiveness ofthe cooperation and should be appropriate to the nature and scope of eachauthority’s responsibility for the supervision or oversight of the FMI andcommensurate with the FMI’s systemic importance in the cooperating
authorities’ various jurisdictions. Cooperative arrangements should be managed
to ensure the efficiency and effectiveness of the cooperation with respect to

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the number of authorities participating in such arrangements.
7. Relevant authorities should provide advance notification, where practicableand otherwise as soon as possible thereafter, regarding pending material
regulatory changes and adverse events with respect to the FMI that may
significantly affect another authority’s regulatory, supervisory, or oversightinterests.
9. Each authority maintains its discretion to discourage the use of an FMI or
the provision of services to such an FMI if, in the authority’s judgment, the
FMI is not prudently designed or managed, or the principles are notadequately observed. An authority exercising such discretion should provide
a clear rationale for the action taken both to the FMI and to the authority or
authorities with primary responsibility for the supervision or oversight of the
FMI.

Explanatory note
P4.1.3. The division of powers or responsibilities among authorities forregulating, supervising, and overseeing FMIs may vary depending on theapplicable legal and institutional framework and the sources of such powers or
responsibilities may take different forms. Preferably, legislation will clearlyspecify which authority or authorities have responsibility.
P4.5.1. Central banks, market regulators, and other relevant authorities
should cooperate with each other, domestically and internationally (that is,
on a cross-border basis), in order to support each other in fulfilling theirrespective regulatory, supervisory, or oversight mandates with respect to
FMIs. Relevant authorities should explore, and where appropriate, develop
cooperative arrangements that take into consideration [...]

P4.5.2. Cooperative arrangements need to foster efficient and effective
communication and consultation among relevant authorities. Sucharrangements need to be effective in normal circumstances and should be
adequately flexible to facilitate effective communication, consultation, or
coordination, as appropriate, during periods of market stress, crisis situations,and the potential recovery, wind-down, or resolution of an FMI. Inadequate
cooperation, especially during times of market stress and crisis situations, canimpede significantly the work of relevant authorities.
International
coordination

Explanatory note

Identification of FMIs and relevant authorities
P4.5.3. If an authority has identified an actual or proposed operation of across-border or multicurrency FMI in its jurisdiction, the authority should, assoon as it is practicable, inform other relevant authorities that may have an

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interest in the FMI’s observance of the CPSS-IOSCO Principles for financial
market infrastructures. To determine whether such notification is appropriate,
the authority should consider (to the extent it has such information) thenature and scope of other relevant authorities’ regulatory, supervisory, oroversight responsibilities with respect to the FMI and the FMI’s systemic
importance in those authorities’ jurisdictions.

Advance notification
P4.5.10. Relevant authorities should provide advance notification, wherepracticable and otherwise as soon as possible thereafter, regarding pending
material regulatory changes and adverse events with respect to the FMI that
may significantly affect another authority’s regulatory, supervisory, andoversight interests. In particular, for cross-border or multicurrency FMIs,
where other authorities may have an interest in the FMI's observance of theprinciples, advance notification arrangements should take into account theauthorities’ responsibilities with respect to the FMI's potential systemic
importance to their jurisdictions.

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