OBFA-TRANSFORM - The Political Economy of Financing Large-Scale Transformations

The Political Economy of Financing Large-Scale Transformations

Off-Balance-Sheet Fiscal Agencies in Wars, Reconstruction, and the Green Transition

What is OBFA-TRANSFORM?

The transition to a net-zero carbon emission economy is the defining challenge of our age. In spite of a wide range of technical solutions available to drive this transition, one aspect remains unclear: where should the money come from to pay for it?

The OBFA-TRANSFORM project is a six-year research project funded, by Deutsche Forschungsgemeinschaft and based at the Global Climate Forum in Berlin. It studies the political economy of large-scale transformations through the lens of off-balance-sheet fiscal agencies in wars, reconstruction, and the Green Transition.

Objectives

We apply our conceptual framework through historical case studies which examine the financing of politically desired large-scale transformations during the 20th century. We map the transformation of historical monetary architectures during these financing processes, concentrating on the key role played by off-balance-sheet fiscal agencies (OBFAs).

Analyze the financing of past large-scale transformations

Key concepts

Monetary architecture

A methodology to represent historically specific monetary and financial systems as a web of balance sheets that interlock through credit instruments.

Off-balance-sheet fiscal agencies

Public-private institutions whose activities combine traces of monetary and fiscal policy. They can play a critical role to steer monetary architectures in large-scale transformations.

Macro-financial governance process

The systemic financing of a large-scale transformation requires an initial balance sheet expansion, long-term funding, backstopping against financial instability, and eventually a final contraction of balance sheets.

The triad framework

The 'triad' of taxation, government borrowing, and central bank money creation is the conventional way to think about the policy options a state has to finance large-scale transformations. However, it misses out on the critical role of off-balance-sheet fiscal agencies.

Monetary architecture

A methodology to represent historically specific monetary and financial systems as a web of balance sheets that interlock through credit instruments.

Off-balance-sheet fiscal agencies

Public-private institutions whose activities combine traces of monetary and fiscal policy. They can play a critical role to steer monetary architectures in large-scale transformations.

Macro-financial governance process

The systemic financing of a large-scale transformation requires an initial balance sheet expansion, long-term funding, backstopping against financial instability, and eventually a final contraction of balance sheets.

The triad framework

The 'triad' of taxation, government borrowing, and central bank money creation is the conventional way to think about the policy options a state has to finance large-scale transformations. However, it misses out on the critical role of off-balance-sheet fiscal agencies.

Case studies

War
finance

OBFAs played a pivotal role in financing military expenditure in North America and Europe throughout the 20th century. Setting up OBFAs not only enhanced credit money creation at an unprecedented scale but also transformed the monetary architectures for good.

Reconstruction
finance

Post-war reconstruction efforts required massive financial coordination between public and private sectors. OBFAs emerged as crucial intermediaries in channeling resources for rebuilding infrastructure and economic systems.

Green Transition
finance

Modern climate finance leverages OBFA structures to mobilize capital for renewable energy and sustainable infrastructure projects, creating new monetary architectures for environmental transformation.

War
finance

OBFAs played a pivotal role in financing military expenditure in North America and Europe throughout the 20th century. Setting up OBFAs not only enhanced credit money creation at an unprecedented scale but also transformed the monetary architectures for good.

Reconstruction
finance

Post-war reconstruction efforts required massive financial coordination between public and private sectors. OBFAs emerged as crucial intermediaries in channeling resources for rebuilding infrastructure and economic systems.

Green Transition
finance

Modern climate finance leverages OBFA structures to mobilize capital for renewable energy and sustainable infrastructure projects, creating new monetary architectures for environmental transformation.

Team

Olan McEvoy

Doctoral researcher

Dr. Steffen Murau

Principal Investigator

Dr. Armin Haas

Senior researcher

Dr. Andrei Guter-Sandu

Senior associate researcher

Friederike Reimer

Doctoral researcher

Publications

Encumbered Security? Vertical and Horizontal Repos in the Euro Area and Their Inherent Ambiguity	Journal of Financial Regulation - (2025)	Steffen Murau, Alexandru-Stefan Goghie, Matteo Giordano
Shadow Money in the History of Monetary Thought	Review of Political Economy - (2025)	Steffen Murau, Tobias Pforr
Rethinking Currency Internationalisation. Offshore Money Creation and the EU's Monetary Governance	Journal of European Public Policy - (2025)	Steffen Murau, Jens van ’t Klooster
Schrödinger's Off-Balance-Sheet Fiscal Agency. The Recovery and Resilience Facility and the Limits to Incremental Fiscal Integration in Europe	Journal of European Integration - (2025)	Friederike Reimer, Andrei Guter-Sandu, Armin Haas, Steffen Murau
Green Macro-Financial Governance in the European Monetary Architecture. Assessing the Capacity to Finance the Net-Zero Transition	Competition and Change - (2024)	Andrei Guter-Sandu, Armin Haas, Steffen Murau

Showing 5 of 11View all publications →

Encumbered Security? Vertical and Horizontal Repos in the Euro Area and Their Inherent Ambiguity

Journal of Financial Regulation - (2025)

Steffen Murau, Alexandru-Stefan Goghie, Matteo Giordano

Shadow Money in the History of Monetary Thought

Review of Political Economy - (2025)

Steffen Murau, Tobias Pforr

Rethinking Currency Internationalisation. Offshore Money Creation and the EU's Monetary Governance

Journal of European Public Policy - (2025)

Steffen Murau, Jens van ’t Klooster

Showing 3 of 11View all publications →

Working Paper Series

OBFA-TRANSFORM
Working Paper Series

The OBFA-TRANSFORM Working Paper Series publishes ongoing research output by the group that applies the Monetary Architecture framework and the OBFA concept on various contemporary and historical subjects.

No. 12-EN

Securitising System Costs. The United Kingdom’s Arm’s-Length Derisking Regime for the Green Transition

Andrei Guter-Sandu

November 2025

No. 11-EN

A Silent Revolution in the Suburbs. Off-Balance-Sheet Fiscal Agencies in U.S. Mortgage Finance, 1932-1981

Olan McEvoy, Fanny Chaltiel, Andrei Guter-Sandu, Steffen Murau

September 2025

No. 10-EN

Mind the MacMillan Gap: Off-Balance-Sheet Fiscal Agencies in Britain's Post-War Industrial Financing, 1945-1973

Olan McEvoy, Moritz Kapff, Andrei Guter-Sandu, Steffen Murau

September 2025

No. 9-EN

From Stabilisation to Strategic Mobilisation. The Exchange Equalisation Account as a Wartime Off-Balance-Sheet Fiscal Agency, 1932-1945

Andrei Guter-Sandu, Olan McEvoy, Verena Gradinger, Steffen Murau

September 2025

No. 8-EN

Après le Déluge. Managing Balance Sheet Contraction after the First World War

Armin Haas, Verena Gradinger, Andrei Guter-Sandu, Steffen Murau

September 2025

No. 7-EN

All Quiet on the Fiscal Front? Off-Balance-Sheet Fiscal Agencies in the German War Economy, 1914-1918

Armin Haas, Olan McEvoy, Andrei Guter-Sandu, Steffen Murau

July 2025

View all

The OBFA-TRANSFORM YouTube channel hosts video content related to the project. This includes videos explaining aspects of our historical and contemporary case studies, as well as content from conferences, workshops, and lectures participated in by the members of the group.

DATASET

online

repository

The repository comprises datasets related to papers of the OBFA-TRANSFORM Working Paper series. This comprises polished data for plots and tables used in the papers as well as raw data related to the general context. The data has been compiled based on a wide range of different sources.

MONETARY ARCHITECTURE ONLINE TOOL

Dynamic Visualization of Interlocking Balance Sheets

What does the online tool do?

Make the Monetary Architecture framework interactive and visualize dynamic change in a web of interlocking balance sheets with a time-shift function

Explain how credit instruments form a self-referential system by tracing on which balance sheets they are held as assets or liabilities

Convey how monetary architectures are historically specific and subject to permanent transformation

Complement academic publications and help communicate the Monetary Architecture framework for teaching, outreach activities, and policy purposes

Available case studies

Global Financial Crisis

Trace the dynamics of contraction, elasticity, and innovation along three phases from August 2007 to January 2009. See how the monetary architectures in the United States and the Eurozone change due to the failures of Countrywide, Bear Stearns, and Lehman Brothers.

Eurocrisis

Trace the dynamics of contraction, elasticity, and innovation along three phases from October 2009 to September 2012. See how the Eurozone monetary architecture was hit by an exacerbating sovereign debt crisis that was halted through bailouts and a central bank guarantee for national treasuries.

Photo gallery

Strategizing at the 2025 strategy meeting

Discussions at the 2025 strategy meeting

Group picture after the 2025 Spring Meeting at Hertie School

On the steel plant tour near Saarbrücken

Visiting the National Archives in London

Research in the National Archives in London

More research in the National Archives in London

Detecting OBFA financing in the United Kingdom

Visiting the archive of the Bank for International Settlements in Basel

Research at the Bank for International Settlements

Workshop to conceptualize the Eurocrisis

Group picture after a 2024 workshop in Cape Town

Group picture during visit to the European Central Bank in 2023

Group picture after a 2023 symposium in Hanover

Steffen presenting at the 2025 EAEPE conference in Athens

Verena presenting at the 2025 EAEPE conference in Athens

Panel at the 2025 EAEPE conference in Athens

Andrei presenting at the 2025 World Economic History Congress in Lund

Armin explaining German OBFAs at the 2025 Berlin Summit

Matteo presenting at a 2025 workshop in Valence

Friederike presenting at the 2024 CES conference in Lyon

Steffen attending a panel discussion in London

Friederike presenting at a 2024 workshop in Cape Town

Symposium organized by the group in 2024

Mark Schwartz presenting at the 2024 symposium in Berlin

Steffen presenting at the 2024 symposium in Berlin

Panel discussion at the 2024 symposium in Berlin

Matteo presenting at the 2023 EAEPE conference in Leeds

Steffen attending a panel discussion at the 2023 MMT Conference in Berlin

Steffen presenting at the 2023 MMT Conference in Berlin

Andrei presenting at a 2023 workshop in Berlin

Discussions during a 2023 workshop in Berlin

Steffen attending a panel discussion at 2023 Money as a Democratic Medium conference in Hamburg

Steffen presenting at a 2023 workshop in Darmstadt

Get in touch

Email

steffen.murau @globalclimateforum.org

Our location

Global Climate Forum Neue Promenade 6 10178 Berlin

The Political Economy of Financing Large-Scale Transformations

Off-Balance-Sheet Fiscal Agencies in Wars, Reconstruction, and the Green Transition

What is OBFA-TRANSFORM?

Objectives

Analyze the financing of past large-scale transformations

Theorize OBFAs' role and implications for democratic governance

Use historical insights to build actionable policy prescriptions

Key concepts

Monetary architecture

A methodology to represent historically specific monetary and financial systems as a web of balance sheets that interlock through credit instruments.

Off-balance-sheet fiscal agencies

Public-private institutions whose activities combine traces of monetary and fiscal policy. They can play a critical role to steer monetary architectures in large-scale transformations.

Macro-financial governance process

The systemic financing of a large-scale transformation requires an initial balance sheet expansion, long-term funding, backstopping against financial instability, and eventually a final contraction of balance sheets.

The triad framework

The 'triad' of taxation, government borrowing, and central bank money creation is the conventional way to think about the policy options a state has to finance large-scale transformations. However, it misses out on the critical role of off-balance-sheet fiscal agencies.

Monetary architecture

A methodology to represent historically specific monetary and financial systems as a web of balance sheets that interlock through credit instruments.

Off-balance-sheet fiscal agencies

Public-private institutions whose activities combine traces of monetary and fiscal policy. They can play a critical role to steer monetary architectures in large-scale transformations.

Macro-financial governance process

The systemic financing of a large-scale transformation requires an initial balance sheet expansion, long-term funding, backstopping against financial instability, and eventually a final contraction of balance sheets.

The triad framework

The 'triad' of taxation, government borrowing, and central bank money creation is the conventional way to think about the policy options a state has to finance large-scale transformations. However, it misses out on the critical role of off-balance-sheet fiscal agencies.

Case studies

Warfinance

OBFAs played a pivotal role in financing military expenditure in North America and Europe throughout the 20th century. Setting up OBFAs not only enhanced credit money creation at an unprecedented scale but also transformed the monetary architectures for good.

Reconstructionfinance

Post-war reconstruction efforts required massive financial coordination between public and private sectors. OBFAs emerged as crucial intermediaries in channeling resources for rebuilding infrastructure and economic systems.

Green Transitionfinance

Modern climate finance leverages OBFA structures to mobilize capital for renewable energy and sustainable infrastructure projects, creating new monetary architectures for environmental transformation.

Warfinance

OBFAs played a pivotal role in financing military expenditure in North America and Europe throughout the 20th century. Setting up OBFAs not only enhanced credit money creation at an unprecedented scale but also transformed the monetary architectures for good.

Reconstructionfinance

Post-war reconstruction efforts required massive financial coordination between public and private sectors. OBFAs emerged as crucial intermediaries in channeling resources for rebuilding infrastructure and economic systems.

Green Transitionfinance

Modern climate finance leverages OBFA structures to mobilize capital for renewable energy and sustainable infrastructure projects, creating new monetary architectures for environmental transformation.

Team

Olan McEvoy

Dr. Steffen Murau

Dr. Armin Haas

Dr. Andrei Guter-Sandu

Friederike Reimer

Publications

Encumbered Security? Vertical and Horizontal Repos in the Euro Area and Their Inherent Ambiguity

Shadow Money in the History of Monetary Thought

Rethinking Currency Internationalisation. Offshore Money Creation and the EU's Monetary Governance

Schrödinger's Off-Balance-Sheet Fiscal Agency. The Recovery and Resilience Facility and the Limits to Incremental Fiscal Integration in Europe

Green Macro-Financial Governance in the European Monetary Architecture. Assessing the Capacity to Finance the Net-Zero Transition

Encumbered Security? Vertical and Horizontal Repos in the Euro Area and Their Inherent Ambiguity

Shadow Money in the History of Monetary Thought

Rethinking Currency Internationalisation. Offshore Money Creation and the EU's Monetary Governance

Working Paper Series

OBFA-TRANSFORMWorking Paper Series

Securitising System Costs. The United Kingdom’s Arm’s-Length Derisking Regime for the Green Transition

A Silent Revolution in the Suburbs. Off-Balance-Sheet Fiscal Agencies in U.S. Mortgage Finance, 1932-1981

Mind the MacMillan Gap: Off-Balance-Sheet Fiscal Agencies in Britain's Post-War Industrial Financing, 1945-1973

From Stabilisation to Strategic Mobilisation. The Exchange Equalisation Account as a Wartime Off-Balance-Sheet Fiscal Agency, 1932-1945

Après le Déluge. Managing Balance Sheet Contraction after the First World War

All Quiet on the Fiscal Front? Off-Balance-Sheet Fiscal Agencies in the German War Economy, 1914-1918

DATASET

online

repository

MONETARY ARCHITECTURE ONLINE TOOL

What does the online tool do?

Available case studies

Photo gallery

Get in touch

Email

Our location

War
finance

Reconstruction
finance

Green Transition
finance

War
finance

Reconstruction
finance

Green Transition
finance

OBFA-TRANSFORM
Working Paper Series