Getting the Dog to Bark: Disclosing Fiscal Risks from the Financial Sector

Timothy Irwin ()

Journal of International Commerce, Economics and Policy (JICEP), 2016, vol. 07, issue 02, 1-17

Abstract: Fiscal reporting is intended to warn of fiscal crises while there is still time to prevent them. The financial crisis thus seems to reveal a failure of fiscal reporting: Before the crisis, even government reports on fiscal risk typically did not mention banks as a possible source of fiscal problems. One reason for silence was that the risk arose partly from implicit guarantees, and governments may have feared that disclosure would increase moral hazard. The crisis cast doubt, however, on the effectiveness of silence in mitigating risks. This paper discusses how fiscal risks from the financial sector could be discussed in reports on fiscal risk, with a view to encouraging their mitigation.

Keywords: Implicit guarantees; contingent liabilities; fiscal risks; budget reports; financial crisis (search for similar items in EconPapers)
Date: 2016
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Working Paper: Getting the Dog to Bark: Disclosing Fiscal Risks from the Financial Sector (2015)
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DOI: 10.1142/S1793993316500101

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