The five financial regulators of the Philippines have inked a pact for greater identification, monitoring, and prevention of system-wide financial risks, a government press release said.

A memorandum of agreement for the creation of the Financial Stability Coordination Council  was signed Wednesday by officials of the Bangko Sentral ng Pilipinas, the Department of Finance, Insurance Commission, Philippine Deposit Insurance Corporation, and Securities and Exchange Commission.

BSP Governor Amando Tetangco Jr. said the Council will look into issues involving global reform initiatives on shadow banking, securities borrowing and corporate leverage, capital flows, asset bubbles, and capital market reforms, among others.

He said latest developments in the capital markets have shown that previously unmonitored and unrecognized risks could create system-wide consequences that are a burden borne ultimately by financial consumers.

Thus, there is a need to monitor all developments in a coordinated effort to be able to address it and not affect the financial system, he said.

He also said there have been global reforms such as the Basel 3 Accord, Financial Market Infrastructures, and consumer protection that have been put in place to prevent recurrence of dislocations worldwide.

He noted that the financial stability agenda talks of co-mingled risks, and systemic consequences.*PNA

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