Diokno gets 2nd term at helm of financial stability group, vows stronger voice for emerging economies

MANILA, Philippines—The Philippine central bank chief vowed to help emerging market economies have a bigger say in combatting systemic risks on the international stage after he was reappointed to a second term as chair of a regional financial stability group.

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno will serve a second term as co-chair of the Regional Consultative Group for Asia (RCGA) of the Financial Stability Board.

This marks the first time a chair of the group will serve a second two-year term at its helm, following Diokno’s current term which expires at the end of June 2021.

Continuing his recent initiatives, Governor Diokno said that he wants to amplify the voice of emerging economies in the region in the discussion of systemic risks at the global stage.

“I am thankful for the privilege and welcome the challenge to serve a second term as co-chair of the RCGA,” he said. “I look forward to the opportunity to actively work with my colleagues in the RCGA, addressing the after-effects of the pandemic and re-establishing financial stability in the region.”

The RCGA brings together national authorities responsible for financial stability in 17 jurisdictions. Its members include financial authorities from Australia, Brunei Darussalam, Cambodia, China, Hong Kong SAR, India, Indonesia, Japan, Korea, Malaysia, New Zealand, Pakistan, the Philippines, Singapore, Sri Lanka, Thailand and Vietnam.

Diokno first took the helm of the RCGA in July 2019, and his second term will end in June 2023.

He explained that “the very point of the FSB in establishing the regional consultative groups is so that the discussions extend beyond the formal G20 membership. Global standards and best practices apply to all and we should leverage this opportunity to shape the discussion and its agreed outcomes.”

Originally, the group’s policy objective of financial stability was drawn from the lessons of the 2007 global financial crisis, but the emergence of the COVID-19 virus was a risk that was unforeseen.

Experts have pointed out that COVID-19 was a test case for how far the world has progressed on the financial stability agenda after the global financial crisis, despite the absence of a playbook for the policy issues caused by the pandemic-cum-recession.

“I have said it before that our guiding principle moving forward is one of balance,” Diokno said.

“We have to balance providing the interventions that address the needs today while remaining conscious of the possible longer-term effects of these interventions,” he added. “As prudential authorities, we must balance the certainty provided by regulations against the need for flexibility so that we can respond to this once-in-a-lifetime crisis.”

TSB