BSP’s Tetangco to head int’l settlement bank’s council

BSP Governor Amando M. Tetangco Jr.: ‘Very hawkish’. INQUIRER FILE PHOTO

MANILA, Philippines—Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. has been appointed to an influential post that helps set the direction of international financial sector regulations.

In a statement this week, the Basel-based Bank for International Settlements  said Tetangco was named head of the international regulator’s Asian Consultative Council (ACC) Board of Governors.

“The ACC comprises the Governors of the BIS member central banks in the Asia-Pacific region. It facilitates communication between these central banks and the BIS Board and Management on matters of interest to the central banking community in Asia and the Pacific,” the statement said.

“It also provides guidance for the research and banking activities of the BIS Representative Office for Asia and the Pacific in Hong Kong,” it added.

Tetangco, whose two-year term as ACC chairman starts on April 1, replaces Choongsoo Kim, governor of the Bank of Korea. Kim has served as ACC head since October 2012.

As head of the ACC, Tetangco will help steer the direction of banking system regulations of the BIS, which aims to maintain the stability of the world’s financial system.

The so-called Basel rules for banks, covering a range of areas from bank capitalization standards and risk management rules, are crafted by the BIS. All BIS members are required to implement these Basel rules in their respective jurisdictions.

In the aftermath of global recession of 2008, the BIS issued Basel III rules for all banks around the world. These rules mandate banks to set aside more capital in relation to their assets, which makes excessive risk-taking more expensive.

On Tetangco’s order, Basel III rules on bank capitalization took effect in the Philippines at the start of 2014—way ahead of the BIS’ 2019 deadline. Tetangco is the only Philippine central bank governor to be appointed to two consecutive terms.

Tetangco has so far received the top grade of “A” from Global Finance Magazine for five of his eight years as head of the country’s monetary authority and top financial system regulator.

The BSP’s policy framework for microfinance, which promotes the inclusion of the marginalized in the formal banking sector, was also hailed as the best in the world by the Economist Intelligence Unit (EIU) in 2009.