Diokno retained as co-chair of FSB-RCGA

BANGKO SENTRAL ng Pilipinas (BSP) Governor Benjamin E. Diokno has been appointed for a second term as the co-chair of a regional group of the Financial Stability Board.

Mr. Diokno will continue to co-chair the Regional Consultative Group for Asia of the Financial Stability Board (FSB-RCGA) until June 2023, the central bank said in a statement on Monday. His first term as co-chair of the body started in July 2019 and ended this month.

Members of the FSB-RCGA 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.

“I am thankful for the privilege and welcome the challenge to serve a second term as co-chair of the RCGA. 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,” Mr. Diokno was quoted as saying.

He said the FSB’s regional groups are meant to extend discussions beyond the G20.

“Global standards and best practices apply to all and we should leverage this opportunity to shape the discussion and its agreed outcomes,” he added.

The central bank chief said systemic risks like the coronavirus disease 2019 (COVID-19) pandemic will continue to be key points for discussion at the RCGA.

“We have to balance providing the interventions that address the needs today while remaining conscious of the possible longer-term effects of these interventions. 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,” Mr. Diokno said. 

“While the policy objective of financial stability was drawn based on the lessons of the 2007 global financial crisis (GFC), the emergence of the COVID-19 virus is the systemic risk that was not foreseen. Many experts have previously pointed out that COVID-19 is a test case for how far the world has progressed on the financial stability agenda post-GFC, even though there is no ready playbook for the policy issues caused by this pandemic-cum-recession,” the BSP said.

The country’s Financial Stability Coordination Council, which is chaired by Mr. Diokno, in April said the impact of the pandemic on borrowers’ capacity to repay their debt is a risk to financial stability, but is seen to be manageable in the near term. — LWTN