Officials of the Bangko Sentral ng Pilipinas (BSP) and the Federal Reserve Bank of Cleveland (FRBC) recently conducted talks on global financial stability in a conference held in the US.
The BSP said in a statement that FRBC President and CEO Loretta J. Mester and BSP Senior Assistant Governor Johnny Noe E. Ravalo met during the 10th Financial Stability Conference to exchange ideas on “current global systemic risk issues and the future agenda for financial stability.”
The two-day conference in mid-November was co-hosted by the FRBC and the US Treasury’s Office of Financial Research (OFR).
Ravalo was accompanied by another BSP official, Theresa T. Gapaz, when they met with senior FRBC and OFR officials after the conference. “They discussed the experience of the US in instilling a new systemic risk mindset after the Global Financial Crisis,” said the BSP.
The conference also included officials from the International Monetary Fund, Bank for International Settlements, the European Central Bank and the European Securities and Market Authorities.
It was headlined as well by the New York Federal Reserve Board, Federal Reserve Banks of Cleveland, Minneapolis, and San Francisco; the Federal Deposit Insurance Company; and international organizations and the academe.
In the Philippines, the BSP leads the Financial Stability Coordination Council (FSCC) which includes four other financial regulators, namely the Department of Finance, the Securities and Exchange Commission, the Philippine Deposit Insurance Corp. and the Insurance Commission.
The FSCC is tasked with global systemic risk surveillance as well as managing systemic risks to the country’s financial stability.
Last June, the FSCC launched the Systemic Risk Crisis Management (SRCM) framework. The SCRM involves the continuous surveillance of risk trends; review of infrastructures; conduct of systemic stress tests; and arrangements for communication both under normal and stressed conditions.
Ravalo said the SRCM framework is about the concept of resilience and it allows regulators to anticipate, assess, and evaluate where the vulnerabilities will come from and what kind of interventions will work to contain it.
The SRCM basically defines arrangements among the FSCC members. The FSCC meantime identifies, monitors, manages, and mitigates the build-up of systemic risk in the local financial system.