The Central Bank as Fiscal Agent for the Government is part and parcel of a much wider complex. The way a society organizes itself in these respects affects every citizen and therefore also the whole of the electorate. As a consequence the relation between the public entities involved in delivering these services are very sensitive and in principle political in nature. This also holds true of the relations between a central bank and government of which the fiscal agent function is one aspect.
Solutions differ from country to country and over time.
Even in broadly comparable countries different approaches can be observed. These differences are normally not the result of agreements among the parties concerned. Much rather what a central bank is entitled or required to do is normally fairly precisely spelt out in an act of Parliament setting up the central bank and detailing its responsibilities. These legal provisions in turn frequently reflect historic developments and social aspirations subject to changes in the course of time. Obviously the bank is not at liberty to deviate from these provisions except for changes to the act via the appropriate parliamentary proceedings.