Publication: A Framework for Managing Government Guarantees
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2020-05
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2020-05-29
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Managing government debt guarantees is difficult because the potential costs of guarantees are hard to estimate and typically do not show up in the reported budget deficit. A good framework for managing guarantees can, however, help governments overcome the difficulty and enhance the transparency of guarantees. This paper sets out a checklist of issues for a government to consider when designing or revisiting its framework for managing guarantees. The checklist comprises: (1) steps to establish macroeconomic control over guarantees by setting limits on their use and restricting the authorization to grant them; (2) steps to improve decisions to grant individual guarantees by means of guidelines, restrictions, conditions, cost estimation, guarantees fees, and a structured process for making the decisions; and (3) steps to ensure careful management after the granting of guarantees, including the recording and reporting of guarantees, arrangements to pay when necessary, and learning from past experience.
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“Razlog, Lilia; Irwin, Tim; Marrison, Chris. 2020. A Framework for Managing Government Guarantees. MTI Discussion Paper;No. 20. © World Bank. http://hdl.handle.net/10986/33828 License: CC BY 3.0 IGO.”
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