Category : Press Release
Date : November 14, 2020
Agency : Bangko Sentral ng Pilipinas
Title : BSP Governor Chairs Regional Financial Stability Meeting
Article : Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno chaired the recent Regional Consultative Group for Asia (RCGA) meeting of the Financial Stability Board (FSB). Together with other consultative groups for the Americas, Commonwealth of Independent States, Europe, Middle East and North Africa, and Sub-Saharan Africa region, the RCGA was created by the FSB to further the standard setting body’s dialogue and implementation of the global financial stability agenda.

The COVID-19 outbreak has forced the RCGA to hold its bi-annual meeting through an online platform. Yet as Governor Diokno emphasized, it is ironically “the circumstances of this year which suggest that managing systemic risk is at its most urgent… [as] no one in this meeting doubts that the financial market will be affected, at some point and in some form.”

In the session on regional vulnerabilities, Governor Diokno pointed out that the authorities learned from the 1997 Asian Financial Crisis and the 2007 Global Financial Crisis by making sure that there was adequate liquidity in the system. He then opened the session by asking the members a seemingly simple yet deliberately probing questions: “Seven months since [the declaration of the pandemic], are we ready to look ahead?”

The RCGA members had an engaging discussion on the implications of the COVID-19 pandemic, and the steps taken to support sound recovery. With the recent prognosis of a global recovery that play out well into 2021 and likely to be at a different pace across jurisdictions, the members weighed the delicate timing of any exit from expansionary policies and other regulatory relief measures.

Following up on the recent publication of the FSB of a roadmap for enhancing cross-border payments, the members discussed various opportunities for how these can be made faster, cheaper, more transparent, and more inclusive. While the FSB roadmap sets out actions that RCGA members can consider, Governor Diokno nonetheless noted that cross- border payment systems presently face several challenges in each jurisdiction and these need to be addressed before the region can reap its broader benefits for transfers, payments and remittances.

In his closing remarks, Governor Diokno acknowledged that the COVID-19 pandemic-cum-recession is forcing the authorities to develop new perspectives while introducing needed interventions. “We do not have a ready playbook for addressing the financial market spillovers but we are quite sure that risk aversion abounds and incomes have been lost,” he pointed out. He then concluded, “That only means that much more work is ahead of us and I encourage all the participants to keep our communication channels open.”

The RCGA is composed of the national authorities responsible for financial stability from 17 jurisdictions in Asia. The FSB, created in April 2009, is an international body that monitors and makes recommendations about the global financial system, in line with the promotion of international financial stability.