Albania, Croatia, Moldova, Russian Federation, Tajikistan, Turkey Group 1 TSA coverage. Cash buffer Albania, Croatia, Moldova, Russian Federation, Tajikistan, Turkey Ankara, March 17, 2016

Problems faced by countries in extending the TSA coverage “Efficiency-Autonomy dilemma” Different actors with different autonomy legal framework and institutional structures IT technology and legislation to design the system Many institutions involved in the design and execution process More complex forecasting needs Special accounts for investment projects and donor funds. Might be a condition of donors 3 countries COTS, 3 countries develop in-house applications.

Practical solutions to those problems Defining the autonomy properly Idle balances in various accounts simply mean borrowing your own money Convincing policy makers by quantifying the potential benefits of an extended TSA Incremental extension by buying in autonomous institutions Innovative payment systems and services Establishing appropriate accounting systems and using chart of accounts to segragate and control Active cash management requires a specialized and high level skill set

Challenges in targeting the cash balance and creating a cash buffer. Lack of efficient interaction between stakeholders involved in the process Lack of infrastructure for cash planning No sufficient resources for cash buffer Lack of appropriate risk management framework (Credit market and operational risks) Forecasting what should happen instead of what will happen

Strategies to overcome the challenges Closer working with debt managers Better interaction with stakeholders (eg central bank) Establishing a strong risk management infrastructure Cash management should be based on realistic budget Publishing cash buffer or not?