This is, of course, reflected in the history of central bank financing of government deficits.
Germany was said to be more comfortable with this idea, since it didn't involve any central bank financing governments directly, and it would formally keep the credit risk off the balance sheet of the ECB.
That is why the Germans resist the French idea of central-bank financing of the EFSF.
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The central government also contributes to financing education in the form of educational innovation projects.
Its aim was to control costs by injecting more competition into the system, and to overhaul financing by introducing a central health fund.
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Spanish lenders (unlike Irish banks) have sharply reduced their dependence on short-term financing from the European Central Bank, from a peak reached in July.
But until recently, it has mainly served as a financing vehicle for the central government to help fund the construction of airports, highways and other infrastructure projects.
Brazil's central bank has stepped in to provide financing to exporters.
The market has benefited from Europe's approval of another bailout agreement for Greece and from the new European Central Bank governor's efforts to provide financing for European banks.
Such a move would allow these financing arms to receive cash infusions from the central bank.
He drew parallels with Japan in the 1990s, when the central bank was unable to bypass the banks and get financing through to the wider economy.
Its central bank will do what most central banks in the world today do--become a financing arm of the government.
However, Mr. Wei said he remains confident that the ministry could get enough financing in the future with the support of the central government.
This year the central government launched a new reform that requires provincial governments to take direct responsibility for financing county governments instead of leaving the job to the tier in-between, the prefecture.
As of last weekend, the second risk seemed to be defused, with the European Union and European Central Bank agreeing on a plan to reduce the Greek debt levels and provide new financing (though questions have since arisen as to whether this plan would be adequate).
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Effective October 1, 2002, for borrowings and investments with the BPD and borrowings from the Federal Financing Bank (FFB), agencies will report amounts consistent with those reported by these central fiduciary agencies, except as noted above.
However, market onlookers are changing the shape of what they expect the Fed to deliver and rather than expanding their balance sheet, investors are sensing that the central bank might rejig the composition of its holdings in an effort to deliver borrowers with more attractive financing options.
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The deals were largely project financing, notably in wind energy projects in the U.S. and resource projects in Central and South America.
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