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This paper discusses appropriate methods for disclosing fiscal risks from exogenous shocks and the realization of explicit or implicit contingent obligations of the government. Expanding on previous guidance prepared prior to the crisis, the note focuses on fiscal risks emerging from recent public interventions in the financial sector. Information on fiscal risks and its public reporting leads to a better understanding of the true state of the public finances. Thus, it helps policymakers design and gets public support for, appropriate responses to the realization of various contingencies. More specifically, in the context of the unfolding global financial crisis, a wide range of public sector interventions have been in support of the financial system. Although these interventions have been necessary, they have generated further fiscal risks. Comprehensive reporting would help governments to define a management strategy of the assets and liabilities that they have taken on their balance sheet and to prepare exit strategies for reducing their presence in the financial sector and eventually withdrawing support.

Macroeconomics --- Public Finance --- Accounting --- Debt --- Debt Management --- Sovereign Debt --- Forecasts of Budgets, Deficits, and Debt --- Governmental Loans, Loan Guarantees, Credits, and Grants --- Public Administration --- Public Sector Accounting and Audits --- Public Enterprises --- Public-Private Enterprises --- Fiscal Policy --- Public finance & taxation --- Civil service & public sector --- Financial reporting, financial statements --- Fiscal risks --- Public debt --- Public sector --- Contingent liabilities --- Fiscal policy --- Public financial management (PFM) --- Economic sectors --- Financial statements --- Debts, Public --- Finance, Public --- Thailand

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The COVID-19 lockdowns have brought about the need of large fiscal responses in all European countries. However, countries across Europe are differently equipped to respond to the shock due to differences in economic conditions and fiscal space. We build on the model by Berger et al. (2019) to compare gains from alternative mechanisms of EU fiscal integration in the presence of moral hazard. We show that any EU response strategy to the COVID-19 crisis excluding mutual financial support to member countries lacks credibility. Some form of fiscal risk sharing is indeed better than none, especially in presence of increasing sovereign default risk of some EU member countries. The moral hazard created by risk sharing can be hedged by introducing some form of fiscal delegation to Brussels. The desirable level of delegation, however, depends on its costs. When these are low, risk sharing and delegation are substitutes and it is optimal to opt for high delegation and low risk sharing. On the contrary, when delegation costs are high, centralization and risk sharing are complements and both are needed. Proposed arrangements at the EU level in response to the COVID-19 shock seem to reflect these basic insights by rotating around a combination of fiscal risk sharing and delegation in the form of fiscal spending conditionality.

Finance: General --- Financial Risk Management --- Macroeconomics --- Public Finance --- Diseases: Contagious --- Structure and Scope of Government: General --- State and Local Government --- Intergovernmental Relations: General --- Governmental Loans, Loan Guarantees, Credits, and Grants --- Fiscal Policy --- Financial Crises --- Debt --- Debt Management --- Sovereign Debt --- General Financial Markets: Government Policy and Regulation --- Health Behavior --- Economic & financial crises & disasters --- Public finance & taxation --- Finance --- Infectious & contagious diseases --- Fiscal union --- Financial crises --- Public debt --- Moral hazard --- COVID-19 --- Fiscal policy --- Debts, Public --- Financial risk management --- Communicable diseases --- Italy

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This paper investigates the role of government intervention in achieving the American dream of homeownership. The study analyzes the role of tax deductions in housing finance, including their impact on homeownership and housing consumption. The role of the Government Sponsored Enterprises in facilitating the creation of a secondary market for mortgage-backed securities is also analyzed as well as the role of the Federal Housing Administration. Cross-country comparisons of how housing is financed in other industrial countries is also provided, emphasizing how other countries have been able to achieve comparable homeownership rates as the United States in a less complicated and fiscally cheaper system. Country experiences of successfully phasing out government intervention are also analyzed.

Home ownership --- Housing --- Taxation --- Finance. --- Infrastructure --- Personal Finance -Taxation --- Real Estate --- Industries: Financial Services --- Production Analysis and Firm Location: Government Policies --- Regulatory Policies --- Governmental Loans, Loan Guarantees, Credits, and Grants --- Fiscal Policies and Behavior of Economic Agents: Household --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Economic Development: Urban, Rural, Regional, and Transportation Analysis --- Housing Supply and Markets --- Personal Income and Other Nonbusiness Taxes and Subsidies --- Finance --- Macroeconomics --- Property & real estate --- Public finance & taxation --- Housing prices --- Tax allowances --- Loans --- Financial institutions --- National accounts --- Prices --- Taxes --- Saving and investment --- Income tax --- United States

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State-owned banks may help to soften the financing constraints of public sector entities and consequently become a factor that hampers fiscal discipline. Using a panel dataset, we find that a larger presence of state-owned banks in the banking system is associated with more credit to the public sector, larger fiscal deficits, higher public debt ratios, and the crowding out of credit to the private sector. These results suggest that the lending practices of state-owned banks should be carefully assessed in any strategy to pursue fiscal discipline.

Banks and banking --- Debts, Public. --- Budget deficits. --- Deficits, Budget --- Budget --- Deficit financing --- Debts, Government --- Government debts --- National debts --- Public debt --- Public debts --- Sovereign debt --- Debt --- Bonds --- State-owned banks --- Government ownership. --- Banks and Banking --- Macroeconomics --- Money and Monetary Policy --- Public Finance --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- National Budget, Deficit, and Debt: General --- Governmental Loans, Loan Guarantees, Credits, and Grants --- Public Enterprises --- Public-Private Enterprises --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Debt Management --- Sovereign Debt --- Banking --- Civil service & public sector --- Monetary economics --- Public finance & taxation --- Commercial banks --- Public sector --- Credit --- Government debt management --- Finance, Public --- Debts, Public

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Government support to banks through the provision of explicit or implicit guarantees affects the willingness of banks to take on risk by reducing market discipline or by increasing charter value. We use an international sample of bank data and government support to banks for the periods 2003-2004 and 2009-2010. We find that more government support is associated with more risk taking by banks, especially during the financial crisis (2009-10). We also find that restricting banks' range of activities ameliorates the moral hazard problem. We conclude that strengthening market discipline in the banking sector is needed to address this moral hazard problem.

Risk. --- Finance, Public. --- Cameralistics --- Public finance --- Public finances --- Currency question --- Economics --- Uncertainty --- Probabilities --- Profit --- Risk-return relationships --- Banks and Banking --- Financial Risk Management --- Inflation --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Financial Institutions and Services: Government Policy and Regulation --- Governmental Loans, Loan Guarantees, Credits, and Grants --- Interest Rates: Determination, Term Structure, and Effects --- Financial Crises --- Price Level --- Deflation --- Banking --- Economic & financial crises & disasters --- Financial services law & regulation --- Finance --- Macroeconomics --- Deposit insurance --- Bank deposits --- Loan loss provisions --- Deposit rates --- Financial crises --- Financial services --- Prices --- Banks and banking --- Crisis management --- State supervision --- Interest rates --- United States