Cash Management : How Do Countries Perform Sound Practices?

Cangoz, M. Coskun ; Secunho, Leandro

World Bank, Washington, DC

关键词: PUBLIC FINANCIAL MANAGEMENT;    CASH FLOW FORECASTING;    CASH MANAGEMENT;    PAYMENT AND SETTLEMENT SYSTEM;    PUBLIC DEBT MANAGEMENT;   

RP-ID  :  153754

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Cash management is simply defined asmaking the right amount of money available at the right timeand the right place to meet the government'sobligations in the most cost-effective way. The mainfeatures of modern cash management are centralizedgovernment bank accounts and establishment of a TreasurySingle Account, ability to make accurate cash flowforecasts, use of short-term financing instruments, andcapacity for the investment of excess cash reserves.Establishing a sound cash management framework with thementioned features is beneficial not only to the governmentsand public entities, but also to other stakeholdersincluding the beneficiaries of government payments, banksand lenders. Given the recent COVID-19 (coronavirus)pandemic and locked-down measures introduced in manycountries, governments had to deal with unanticipatedrevenue decreases, and significantly increased publicexpenditures due to fiscal stimulus packages and pandemicrelated health expenditures. Therefore, existence of awell-structured government cash management is now even moreimportant than before. This paper aims to explore cash flowforecasting and cash management practices in 24 countries invarious regions, at different income levels and technicalcapacity, and alignment to good practices based on theinformation provided at the World Bank workshops on CashFlow Forecasting and Cash Management held in 2018 and 2019.The paper also draws on experiences and practices from otheremerging and advanced countries. Cases from differentcountries indicate that full implementation of modern cashmanagement is still a challenge, even though the TreasurySingle Account system is common in most countries andliquidity buffers were established or increased followingthe Global Financial Crisis. Cash flow forecasting is anarea to improve given the accuracy, horizon and frequency ofthe projections are frequently limited. Fragmentedinstitutional structure makes cash management even morechallenging. Country cases also demonstrate that there is asignificant room to strengthen coordination between debt andcash management and the use of short-term instruments tocover cash shortages. Investment of cash balances seems tobe a bigger weakness as many countries keep their liquiditybuffers in the Central Bank with no remuneration.