BSP wants power over banking units of conglomerates.
BSP wants power over banking units of conglomerates !-- -- Lawrence Agcaoili (The Philippine Star) - March 4, 2019 - 12:00am MANILA, Philippines The Bangko Sentral ng Pilipinas (BSP) is looking at exercising supervisory functions over family-owned conglomerates that control the country's biggest banks and financial institutions. BSP senior assistant governor and general counsel Elmore Capule said the power over conglomerates with banking subsidiaries was one of the reforms being pushed by the central bank in its charter amendments.
"As organizations become larger and larger, it is not sufficient that you can look only into the banks downwards such as banks' subsidiaries and affiliates. You should also be able to look upwards," Capule told reporters.
However, the provision was not able to pass Congress and was not included in Republic Act 11211 signed by President Duterte last Feb. 14 updating the provisions of the central bank's charter.
"But then again we were not granted that authority. So perhaps at some future time we will again try to amend the remaining provisions which we think can enhance our powers better," Capule said.
The country's biggest banks are owned and controlled by family-owned conglomerates. These include BDO Unibank of the SM Group owned by the late retail and banking magnate Henry Sy, Metropolitan Bank and Trust Co.
founded by the late taipan George SK Ty's GT Capital, Ayala-led Bank of the Philippine Islands, Philippine National Bank of tobacco and airline magnate Lucio Tan, Security Bank of the family of Frederick Dy, Sy-led China Bank, Union Bank of the Philippines of the Aboitiz clan, Rizal Commercial Banking Corp. of the late tycoon Alfonso Yuchengco, and Gotianun-owned East West Bank.
Capule said the BSP as a regulator should be allowed to monitor the transactions of conglomerates that could affect the operations of their banking subsidiaries or affiliates. "We have to know what is happening upstairs.
Technically, that's a separate authority kaya we don't have the legal entity to look up unless the law says so," he said. According to Capule, the power to exercise supervisory functions over conglomerates is crucial in achieving the central bank's mandate of financial stability.
"If you want to have a holistic approach, especially authority over financial stability, you have to have a bigger picture," Capule said. He added another provision that was not included in the amended charter of the BSP is the secrecy of bank deposits.
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|Publication:||Philippines Star (Manila, Philippines)|
|Date:||Mar 3, 2019|
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