Interagency body seeks to boost supervision over financial sector

THE FINANCIAL Sector Forum (FSF), a body chaired by the central bank chief, is looking to boost financial supervision in light of assessed gaps in the Bank Secrecy Law and the oversight of conglomerates and financial technology.

Benjamin E. Diokno, governor of the Bangko Sentral ng Pilipinas (BSP) and chairperson of the FSF, said the panel’s member agencies “are committed to implement financial sector reforms to promote effective and seamless supervision across the financial sector.”

Aside from the BSP, the inter-agency body includes the Securities and Exchange Commission, the Insurance Commission and the Philippine Deposit Insurance Corp. Their meeting was held on April 27.

“We will leverage on our cooperative arrangement to align standards and expectations and ensure that we continue to espouse an enabling environment towards an inclusive recovery and economic growth,” Mr. Diokno said.

The FSF members took into consideration the findings of the Financial Sector Assessment Program of the International Monetary Fund (IMF) and the World Bank that pointed to gaps in the country’s Bank Secrecy Law and conglomerate supervision. The findings were published last month.

The same gaps were also cited by the multilateral lenders on the BSP’s Observance of the Basel Core Principles for Effective Banking Supervision in November last year.

Mr. Diokno earlier said that he would request President Rodrigo R. Duterte to certify as urgent a bill seeking to ease the Bank Secrecy Law, noting the Philippines is the only country in the world left with such tight restriction on bank deposit information.

House Bill 8991 seeks to expand the central bank’s supervisory powers to look into deposit accounts of bank officials in cases where there is “reasonable ground for fraud, serious irregularity, or unlawful activity.” It was approved at the chamber’s committee level.

Senate Bill 1802, a counterpart measure of the House bill, was filed last year and is pending at the committee level.

“The results of the Financial Sector Assessment Program assessments will feed into the development of a strategic roadmap for the financial sector,” the central bank said.

The FSF also plans concrete activities that its members aim to push through as part of the establishment of a cooperative oversight framework on fintech innovation.

“In particular, existing regulations will be reviewed to harmonize baseline components and controls in the areas of customer onboarding and consumer protection across the financial sector,” the BSP said.

The memorandum of agreement between regulators was signed in February and was meant to boost the fintech industry’s compliance to measures on cybersecurity, anti-money laundering, counter-terrorism financing, and consumer protection.

“Existing initiatives of the FSF to strengthen information exchange across agencies were also discussed cognizant that this is critical in strengthening risk surveillance activities in the financial sector,” it said.

The multi-agency body is also working with the Commission on Higher Education, the National Economic and Development Authority, and Philam Foundation to craft a general elective course module on financial management, banking, insurance, securities and digital finance to arm students with practical skills in making prudent financial decisions. — Luz Wendy T. Noble

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