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Issue 7. Output of central banks: taxes and subsidies on interest rates applied by central banks

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Description of the issue
The treatment and measurement of the output of central banks is described in paragraphs 6.150 to 6.151. Three broad groups of financial services are identified: monetary policy services, financial intermediation and borderline cases.

One of the borderline cases arises when the financial intermediation of central banks includes policy measures, such as setting interest rates higher or lower than market interest rates. This generates a number of issues. The first is how to measure the output of the central bank, because the use of off-market interest rates by the central bank may cause distortions in measuring its output and value added. The second issue concerns the use of off-market rates which implies that there are flows between the central bank and the counter-party in addition to those concerned with financial intermediation.
Discussions on the issue
Clarification to address the inconsistent treatment of the central banks' output in the 2008 SNA dn ESA 2010 is presented in SNA News and Notes, No. 36 (May 2013).

See also Issue Under Discussion: Output of central banks.

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