Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno on Monday reiterated his call for a more prominent Asia regional stance when it comes to discussions of global systemic risks amid the pandemic-cum-recession woes.
Diokno made this statement after he was appointed for a second term as co-chair of the Regional Consultative Group for Asia of the Financial Stability Board (FSB-RCGA). His first term which began in July 2019, will expire this month.
The BSP said a second term as FSB-RCGA co-chair is “unprecedented” based on the Regional Consultative Groups’ charter.
“I look forward to the next two years as the RCGA crafts solutions to urgent problems that have serious longer-term implications,” said Diokno in a statement.
He also said that more work is needed in the RCGA to deal with the COVID-19 pandemic’s after-effects and in “re-establishing financial stability in the region.”
The statement said it is Diokno’s plan to further “amplify the voice of the emerging economies in the region” particularly in talks dealing with the global systemic risks.
“The very point of the FSB in establishing the regional consultative groups is so that the discussions extend beyond the formal G20 membership. Global standards and best practices apply to all and we should leverage this opportunity to shape the discussion and its agreed outcomes,” said Diokno.
Diokno said that the global pandemic-cum-recession is a systemic risk that the rest of the world is dealing for the first time.
“I have said it before that our guiding principle moving forward is one of balance,” said Diokno. “We have to balance providing the interventions that address the needs today while remaining conscious of the possible longer-term effects of these interventions. As prudential authorities, we must balance the certainty provided by regulations against the need for flexibility so that we can respond to this once-in-a-lifetime crisis,” he added.
Under Diokno’s term as co-chair, the 17-member RCGA have increased pre-emptive talks on how to address the diverging levels of COVID-related recoveries between advanced or rich economies such as the US and emerging markets.
The Switzerland-based FSB is a global venue for financial system reforms to achieve and sustain global financial stability. The RCGA, in the meantime, is one of six regional committees created by the FSB.
Diokno said last May that the RCGA discussions remained focused on the “damages caused by the economic fallout from COVID-19” and what central bank and financial authorities such as the BSP has done to cushion its impact.
The RCGA’s 17 jurisdictions are the Philippines, Australia, Brunei Darussalam, Cambodia, China, Hong Kong SAR, India, Indonesia, Japan, Korea, Malaysia, New Zealand, Pakistan, Singapore, Sri Lanka, Thailand, and Vietnam.