« Coherent Policy, Planning, and Performance for Delivering the SDGs | Main | Lessons for PFM Reform - the PDIA Approach in Africa »

September 22, 2021

Business Continuity Planning for Government Cash and Debt Management

BCP - Sept 22
Posted by Emre Balibek, Ian Storkey, and H. Hakan Yavuz[1]

Cash and debt management operations are core “transactional” functions of public financial management. These functions, by their nature, are exposed to a complex set of operational risks. Business disruptions to government cash and debt management operations can have spill-over effects on the delivery of government services and prevent the efficient functioning of financial markets. For example, a government bond auction that fails because of an outage in the electronic auction platform, may have serious financial and/or reputational consequences for a nation’s financial system.

The COVID-19 pandemic has reinforced the importance of business continuity plans (BCPs) for cash and debt management. As governments around the world announced policies to mitigate the socio-economic impact of the pandemic, government treasuries had to meet additional liquidity requirements imposed by the pandemic. The pandemic has highlighted the shortfalls of existing BCPs which are geared towards shorter disruptions, focus on protecting processes from system failures and data losses, and do not cover the challenges of prolonged working from home. In addition to the pandemic, the implications of technological advances (such as digitalization) for business processes, an evolving set of challenges (cyber risks and others) and emerging risk mitigation options (teleworking, cloud technology, etc.) are also prompting government treasuries to rethink their BCPs.

For developing countries, preparing a BCP still remains a practical challenge. Studies show that many low-income and developing countries have not yet developed and implemented a comprehensive BCP that covers critical processes in cash and debt management. The documentation requirements of BCPs are often excessive, and BCPs can become quickly outdated. Further, solutions set by BCPs may be unrealistic and unreflective of what would actually happen in a crisis that leads to significant business disruption.

The IMF has recently published a Technical Note and Manual (TNM) that provides guidance on the steps that government cash and debt management units can follow to develop and implement a practical BCP that economizes on the resources needed. The Note also discusses the evolving nature of business disruption risks faced by cash and debt managers over the last decade as well as trends and remedies that have emerged.

Country experiences on BCP highlight several key lessons and principles for government treasuries:

  • Reliance on excessive documentation is costly and may not always prove effective. The TNM includes some simple templates for streamlining BCP documentation.
  • The TNM proposes a simplified approach to business impact analysis – a key but resource intensive tool used in the BCP development process - for purposes of cash and debt management, focusing on the time criticality of the business processes.
  • A fully documented BCP may not be available when a disruption occurs, may be difficult to apply in a rapidly evolving crisis, and is unlikely to be fully up to date. The TNM includes a sample pocket card that provides convenient and useful information for staff.
  • When disruptions occur, not all cash and debt management processes have to continue as usual. If a process is not time-critical, it can be delayed, especially when the investment or other measures introduced to reduce the impact of the disruption are more costly than the impact itself.
  • As reliance on ICT infrastructure increases, BCPs should assess cyber threats more thoroughly than ever. Potential threats should be analyzed in detail in terms of their likelihoods and impacts.
  • Attention should not only focus on drafting an initial BCP, but also keeping it as a live document, with regular updates and testing. As such, a BCP should be imbedded in the day-to-day operations of a country’s cash and debt management unit.
  • Maintaining and updating the BCP should be seen as the responsibility of all treasury (cash and debt management) staff.
  • It is important for treasuries to simulate the impacts of “live” scenarios that require the relocation of staff or the widespread use of remote access (as with the COVID-19 crisis). Such exercises can help identify deficiencies in the measures proposed by the government to deal with the disruption, as well as additional risks. It also creates awareness and builds confidence within the treasury as an organization that potential crises can be managed effectively.


[1] Emre Balibek is a Senior Economist at the Fiscal Affairs Department, IMF. Ian Storkey and H. Hakan Yavuz are independent consultants.

Note: The posts on the IMF PFM Blog should not be reported as representing the views of the IMF. The views expressed are those of the authors and do not necessarily represent those of the IMF or IMF policy.


Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Your comment could not be posted. Error type:
Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.


Post a comment

Comments are moderated, and will not appear until the author has approved them.

Back to top of page
©2007 IMF. All Rights Reserved. About Us | Terms of Use
/************* DO NOT ALTER ANYTHING BELOW THIS LINE ! **************/ var s_code=s.t();if(s_code)document.write(s_code)//-->