Press Release June 27, 2009
To better protect depositors and avoid losses of public funds Senator Edgardo J. Angara today suggested that BSP should adapt best practices in banking supervision in order to better protect the interest of the depositors and to avoid losses of the public funds. "Experience in the past highlighted the inability of the Bangko Sentral ng Pilipinas (BSP) to deal effectively and expeditiously with problem banks. The authority of the BSP over problem banks; in general, is limited to the grant of emergency advances in case of illiquidity, or closure in case of insolvency. Prompt corrective actions cannot be implemented due to the absence of clear and strong legal basis. Such inability of the BSP often causes losses of hard-earned money of the depositors and also losses of public funds," said Angara who chairs the Senate Committee on Finance. He added, "To better protect the interest of the depositors and to avoid losses of the public funds, the BSP must therefore adapt various international best practices in banking supervision and other measures that will strengthen the regulatory and supervisory powers of the BSP over banks and other financial institutions." SB 871 seeks to amend the BSP charter. Through the amendments the Central Bank can use transparency mechanisms that can give it more teeth to supervise formal and informal remittance firms. This in turn shall protect OFWs from usurious practices in money transfer. The bill allows BSP to adopt the following international best practices, among others, in banking supervision and other measures that will strengthen the regulatory and supervisory powers of the BSP over banks and other financial institutions: The principle of consolidated supervision;
"This bill is aimed at providing better protection to the public, particularly the depositors and creditors of BSP's supervised institutions," added Angara. |
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