Banks can seek aid from regional central banks in case of emergency
09/24/2008 | 10:59 PM
MANILA, Philippines - In case of a financial emergency, Philippine lenders can seek assistance from the country’s monetary authority or central banks in Asia.
This, in essence, was the message of Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr, who recently attended a meeting of Southeast Asian Central Bank Governors (SEACEN) in Thailand.
Although lenders in the region—including the Philippines—have proven their strength in the face of a US financial meltdown, financial institutions can always depend on a swap facility arrangement forged a more than decade ago.
While Tetangco expressed confidence anew that domestic banks can weather the crisis, he nevertheless said in an email message that the “fund is still there and available should it become necessary."
Established in 1997, the swap facility allows the Philippines to access foreign exchange reserves of other countries, an arrangement that was further bolstered with the participation of China, Japan, and South Korea under the so-called Asean plus three partnership.
Although the swap agreements—all negotiated on a bilateral basis—are renewed every year, no event so far has prompted any member country to implement the arrangement.
As a result, the Thailand meeting cemented their respective beliefs that Asean banks have no need for a rescue package since all of them are resilient.
“We concluded that most Asian banks are resilient and that's because of their resources and the sustained good performance of Asian economies. So we are not in crisis mode here," Tetangco said.
Despite this confidence, central bank governors promised to “closely monitor developments so we know immediately how it would affect the region as a whole."
“We are monitoring the banks on a daily basis and thus far, based on reports we released earlier, nothing unusual is happening. Bank operations are normal, we are stable. There had been no unusual withdrawals nationwide," Tetangco said.
Meanwhile, banks in Europe and the United States have thought twice about lending money until the financial fallout is over, forcing officials of the US—the world’s biggest economy—to come up with a plan to inject anywhere from $500 billion to $1 trillion into the world’s markets. - GMANews.TV
This, in essence, was the message of Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr, who recently attended a meeting of Southeast Asian Central Bank Governors (SEACEN) in Thailand.
Although lenders in the region—including the Philippines—have proven their strength in the face of a US financial meltdown, financial institutions can always depend on a swap facility arrangement forged a more than decade ago.
While Tetangco expressed confidence anew that domestic banks can weather the crisis, he nevertheless said in an email message that the “fund is still there and available should it become necessary."
Established in 1997, the swap facility allows the Philippines to access foreign exchange reserves of other countries, an arrangement that was further bolstered with the participation of China, Japan, and South Korea under the so-called Asean plus three partnership.
Although the swap agreements—all negotiated on a bilateral basis—are renewed every year, no event so far has prompted any member country to implement the arrangement.
As a result, the Thailand meeting cemented their respective beliefs that Asean banks have no need for a rescue package since all of them are resilient.
“We concluded that most Asian banks are resilient and that's because of their resources and the sustained good performance of Asian economies. So we are not in crisis mode here," Tetangco said.
Despite this confidence, central bank governors promised to “closely monitor developments so we know immediately how it would affect the region as a whole."
“We are monitoring the banks on a daily basis and thus far, based on reports we released earlier, nothing unusual is happening. Bank operations are normal, we are stable. There had been no unusual withdrawals nationwide," Tetangco said.
Meanwhile, banks in Europe and the United States have thought twice about lending money until the financial fallout is over, forcing officials of the US—the world’s biggest economy—to come up with a plan to inject anywhere from $500 billion to $1 trillion into the world’s markets. - GMANews.TV
