With financial transactions becoming more and more interconnected and complex risks have evolved and magnified and these developments from a financial regulator’s perspective, mandate a transition from stand-alone to system-wide oversight.
In his presentation to mid-level and senior executives of the Philippine Deposit Insurance Corp (PDIC) during the Financial Stability Seminar recently, Assistant Governor Johnny Noe Ravalo, who heads the Office of Systemic Risk Management of the Bangko Sentral ng Pilipinas (BSP), underscored the need for an integrated, proactive and system-wide risk monitoring and management to avoid a financial crisis on a national scale.
The seminar discussed the concepts of financial stability and financial crisis, and highlighted the importance of interagency collaboration in coordinating efforts to monitor and mitigate systemic risks, spot vulnerabilities, and strengthen regulatory oversight to prevent or limit the impact of a severe disruption in the financial system. Ravalo emphasized the application of macroprudential policy, keeping a watchful eye on the interconnectedness
of the financial and economic systems, and making sure that financial institutions are more resilient.
In his welcome remarks, PDIC President Roberto B. Tan emphasized the need for financial regulators to identify vulnerabilities in the environment and improve preparedness by instituting safeguards to prevent systemic deterioration and severe financial crisis in the country.
A series of Financial Stability Seminars will be conducted at the respective offices of the member-agencies of the Financial Stability Coordination Council (FSCC), namely, the PDIC, BSP, Insurance Commission, Securities and Exchange Commission and the Department of Finance. The FSCC was created in 2014 to facilitate interagency cooperation in identifying, managing and mitigating the buildup of systemic risks in the financial system.