The central bank has noted the possibility that some of the big conglomerates in the country are engaged in “shadow banking” activities, as it seeks new powers to police transactions between lenders and their affiliates.
Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. on Thursday stressed the need to keep a tighter watch on conglomerate-owned banks to ensure the stability of the financial system.
“Right now, what we can look at is what the banks would report. We have noticed, based on the macro data that we gather, that there seemed to be some shadow banking taking place,” Tetangco said, referring to the possibility of hidden transactions between banks and their sister companies.
“The focus on the preservation of financial stability and the relationship between the bank and its affiliates and subsidiaries within the conglomerate is very important in pursuing this,” he said.