Upon completion of this program, participants will be able to:

• Describe the central bank's role as fiscal agent and banker to the government.
• Analyze the mechanics of primary market auctions for government securities and the central bank's role.
• Explain the legal and political economy constraints on central bank financing of the government (**fiscal dominance**).
• Evaluate the trade-offs between debt management objectives (e.g., cost, risk) and monetary policy goals.
• Understand the operational management of government accounts and the implementation of cash management techniques.
• Assess the risks and procedures involved in providing payment and settlement services for government securities.
• Discuss the central bank's advisory role on market structure, liquidity, and debt issuance strategy.
• Formulate an optimal governance framework for the central bank's fiscal agency function.

• Central Bank Treasury and Market Operations Staff
• Government Debt Management Office (DMO) Personnel
• Commercial Bank Fixed Income Strategists and Traders
• Policy Analysts and Economists interested in Fiscal-Monetary Interaction
• Legal and Compliance Officers for Public Finance
• Internal Audit specializing in Government Transactions

Auction simulation exercises, Case studies on historical fiscal dominance episodes, Group project on evaluating a sovereign debt strategy, Policy debates on QE and its fiscal implications, Technical deep dives into government cash forecasting, Role-playing central bank advisory meetings.

Unit 1: Fiscal Agent and Banker Role

• The legal basis for the central bank acting as the government's fiscal agent.
• Core services: maintaining the government's accounts, processing payments, and managing cash flow.
• Operational protocols for high-volume government payment processing and reconciliation.
• The legal prohibition on **direct central bank financing** of government deficits.

• The central bank's role in designing and executing auctions for government securities.
• Operational mechanics of auction systems and the bidding process.
• The advisory function: providing expert advice on issuance timing, maturity structure, and market conditions.
• Managing the settlement of government securities and the transfer of funds.

Unit 2: Policy Coordination and Fiscal Dominance

• How debt management decisions (e.g., short-term vs. long-term debt) impact monetary policy transmission.
• Analyzing the trade-offs between minimizing government debt cost and ensuring financial stability.
• The concept of **fiscal dominance** and its threat to central bank independence and price stability.
• The role of central bank balance sheet policy (e.g., QE) in holding government debt.

• Central bank analysis of sovereign debt sustainability and risk (e.g., rollover risk).
• The central bank's role in promoting the liquidity and efficiency of the government bond market.
• Policy on short selling, repo market functioning, and other government debt market segments.
• Managing the market impact of large-scale asset purchase programs on government bond liquidity.

Unit 3: Cash Management and Account Operations

• Central bank services for optimizing the government's daily cash balance.
• The use of advanced cash forecasting and flow modeling techniques.
• The policy on the remuneration of government deposits at the central bank.
• Operational security and risk control for government accounts and payment instructions.

• The role of the central bank in operating the securities settlement system for government debt.
• Safekeeping services (custody) for government financial assets and securities.
• Managing the legal and operational interface between the central bank and the DMO.
• Compliance with AML/CTF regulations for public sector transactions.

Unit 4: Governance and Accountability

• Establishing clear lines of responsibility between the central bank and the DMO.
• Transparency and reporting requirements for the fiscal agency function.
• Independent audit and oversight of government account management.
• Ethical standards and conflict of interest management in the advisory role.