MANILA -- The Bangko Sentral ng Pilipinas (BSP) has adopted a three-pronged reform to ensure that domestic banks are ready for technological innovations to fully cater to their clients. BSP Deputy Governor Chuchi Fonacier said the domestic banking sector is “currently in a position of strength.”
“This is largely due to BSP’s sustained implementation of pro-active and meaningful reforms for the banking sector and banks’ commitment to these reforms as manifested through their prudent risk-taking behavior,” she said.
The central bank official the adoption of a three-pronged approach was aimed at “sustain(ing) a more sound, stable and inclusive banking system in the future.”
“Specifically, we will pursue reforms that are geared towards achieving a more dynamic banking system that is ready to embrace the digital transformation of the system and responsive to the developmental needs of our economy,” she said.
Fonacier said these reforms lean on the words dynamic, digital, and developmental. She said the central bank needs to be dynamic to be attuned to the developments on how financial services are being delivered to date.
She said there was also a need for the central bank to “continue to craft meaningful and pro-active reforms that are aligned with best practices and international standards, (and) at the same time sensitive to local conditions.”
Among the priority reforms are the continuing review of existing processes to promote efficiency or streamline processes such as current licensing framework of banks, implementation of remaining Basel III liquidity standards on intraday liquidity risks report of banks and net stable funding ration.
“The enhancement of the banking system’s compliance with the Basel Accord through the implementation of other Basel III reform standards governing interest rates in the banking book, risk-based pricing for consumer loans, reforms in banks’ over-the-counter derivatives transactions shall similarly be pursued to make the domestic banking system more dynamic in responding to the demands and challenges of a rapidly evolving global financial services industry,” Fonacier added. (PNA)
