BSP to impose liquidity requirement for banks

The Philippines may soon be a step ahead of most advanced economies, in terms of implementing the latest international regulations, once the Bangko Sentral ng Pilipinas imposes a liquidity requirement for local banks.

According to a provision of Basel 3, an updated set of regulations meant to enhance banking standards, regulators are advised to require banks to put up a certain amount, which may be on top of their regular capital, to cover basic risk exposures.

Many advanced economies chose to implement provisions of Basel 3 on a staggered basis until 2018. But the BSP said it would want the Philippines to be a bit ahead of the industrialized countries.

Other emerging Asian countries are as aggressive as the Philippines in implementing the provisions of Basel 3 ahead of the advanced economies, BSP Deputy Governor Nestor Espenilla Jr. said.

The BSP, Espenilla said, is set to release discussion papers on the proposed liquidity requirement and will gather inputs from industry members. After that, the BSP will issue a circular on the liquidity requirement.

The BSP normally gives banks 90 days to give inputs on draft circulars and discussion papers on proposed regulations, he said.

“We can come up with the discussion paper late this month and hopefully issue the circular before the end of the year,” Espenilla said.