Accounting Standards for Central Banks

Financial reporting issues have traditionally been brushed under the carpet in central banks. Today's required levels of accountability and transparency mean this is no longer possible. Tough choices must be made over sensitive issues like reserve reporting and dividend policy. But how far can and should central banks adopt commercial standards for financial reporting? To answer this question Accounting Standards for Central Banks brings together in one volume contributions from leading international experts. Key sections explore critical issues such as profit distribution, foreign reserve accounting and the practicalities of adopting international accounting standards. Original case studies, and an exhaustive survey of best practice in over 40 central banks, illustrate how leading central banks are in fact tackling these challenges. Accounting Standards for Central Banks addresses the following issues: tHow far can central banks follow international accounting standards? tHow should central bank profits be measured and distributed? tWhat are the implications of IMF standards for central bank transparency? tWhat should central banks disclose about their reserve asset portfolios? New international standards IMF safeguards assessments now require central banks from borrower countries to adopt "credible" accounting standards. This raises a host of technical challenges: fair valuation of financial instruments in particular can be a shock for central banks. New accounting treatment can profoundly affect functions such as reserve management and, most sensitive of all, the dividend policy of the central bank. All these issues are discussed in detail. Profits and capital If central banks are unable to guarantee their funding, their independence is threatened. Questions regarding central bank profits, dividends and capital are perennially controversial. Key chapters investigate how leading central banks have tackled these issues, and what constitutes best practice. Contributions examine the use