A NEW organization, to be known as a “supervisory college” consisting of various regulators, will be established later this year to monitor the stability of financial conglomerates, the Bangko Sentral ng Pilipinas (BSP) said.
A pilot run is expected in the second quarter of the year, BSP Governor Benjamin E. Diokno said at an online briefing on Thursday.
The supervisory college will consist of members of the Financial Sector Forum, which includes regulators like the BSP, the Securities and Exchange Commission, Insurance Commission, and the Philippine Deposit Insurance Corp.
“Financial conglomerates make up more or less 60% of the financial system. Given the systemic importance of these entities, (financial regulators) felt the need to further strengthen supervision for a more effective discharge of their mandates under their respective charters,” Mr. Diokno said.
Members of the college will undergo training in significant risk issues. The body will also carry out impact analyses of risks specific to each of the conglomerates, and draft a supervisory plan.
The work of the college will complement that of the Financial Stability Coordination Council (FSCC), which includes regulators as well as representatives of the Department of Finance.
“The supervisory college will take a micro prudential approach while the FSCC see takes more of a macro prudential approach in tackling risk of contagion among different financial markets as well as the financial and real sectors. So, the supervisory college may elevate to the FSCC financial stability issues,” Mr. Diokno said.
Earlier this month, the FSCC identified various issues that need to be addressed to sustain the economic recovery and to promote financial stability, citing the state of public infrastructure, supply bottlenecks, social inequity, and climate change. — Luz Wendy T. Noble
