MANILA – Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla on Friday assured the public that the country’s “banking system remains safe and sound” amid the challenges being faced by banks overseas.
“We have shown our resilience through the pandemic, and we continue to be strong in the face of the ongoing turbulence in the global markets,” he said in a statement.
Medalla made the statement after the current challenges in the US following last week’s collapse of California-based tech-focused Silicon Valley Bank (SBV) – the second largest bank failure in the US to date – after a bank run.
This is followed by the collapse of the New York-based Signature Bank.
Over the weekend, another US-based bank, First Republic Bank, said it has tapped the Federal Reserve and JP Morgan Chase for financing to beef up its financial health.
The US government, in turn, has assured depositors of SVB that their funds are protected and they will have access to it.
Similarly, Credit Suisse said it would tap the liquidity support being extended by the Swiss National Bank by borrowing about USD53.7 billion (50 billion Swiss francs) to bolster its financial capacity, which somehow appeased markets following the estimated 30 percent crash of the lender’s shares.
Switzerland’s second-largest bank has been facing challenges for some time now due in part to a series of scandals and compliance issues.
Its largest investor, the Saudi National Bank, has discounted additional placements in one of the biggest banks in the world to help keep it afloat.
With these developments, Medalla said, “The BSP recognizes the actions taken by banking supervisory authorities to address the potential contagion risk from the close of banks.”
“Nonetheless, we will respond accordingly as market conditions evolve,” he said.
He also cited that “our long-standing efforts in consultation with the industry in setting prudent standards and executing risk practices remain the key pillar in safeguarding the interest of the Filipino people.”
“We reiterate our earlier statement that our banks do not have any material exposure to the failed institutions,” he added. (PNA)