Financial Stability Coordination Council institutionalized

PRESIDENT Rodrigo R. Duterte has signed an order institutionalizing an interagency body that assesses risks to and discusses appropriate policies to maintain the country’s financial stability.

Executive Order No. 144 signed by Mr. Duterte on July 6 formally institutionalized the Financial Stability Coordination Council (FSCC) as an interagency council.

The FSCC was previously a voluntary body convened quarterly and composed of the officials of the Bangko Sentral ng Pilipinas (BSP), the Department of Finance, the Securities and Exchange Commission, the Insurance Commission, and the Philippine Deposit Insurance Corp.

The council’s Executive Committee is chaired by the BSP chief and is composed of the top officials of the member agencies. The National Treasurer may also be invited to the meetings of the committee as a special non-voting member.

One senior official from each of the five member agencies shall serve as non-voting members, the EO added.

The council’s executive committee shall meet “periodically…as may be necessary,” the order said. The funding requirements for the operations of the FSCC shall be charged against the budget of the BSP, it added.

The FSCC was first convened on Oct. 4, 2011 and was formalized Jan. 29, 2014 through the signing of a memorandum of agreement.

The council meets to assess possible systemic risks — or disruptions to any part of the financial system that could affect the rest of the economy — and to decide on appropriate policy interventions.

It also formulates a Macroprudential Policy Strategy Framework, which reflects financial authorities’ thinking, institutional arrangements, as well as interventions and tools to be used to maintain the resilience of the financial system against these systemic risks.

The EO said the council can issue directives or policy regulations in the pursuit of its objective of financial stability; align various policies, regulations, supervisory frameworks, programs and initiatives on financial stability; and coordinate with foreign regulators on financial stability and macroprudential policy.

The council can also collaborate with public and private organizations for data collection and research for its policy recommendations, as well as formulate and adopt its own governance and operational guidelines, the order said.

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