Advertisement

BSP adopts new bank assessment framework

The Bangko Sentral ng Pilipinas said Thursday it will push through with the implementation of the Supervisory Assessment Framework this month to help enhance the stability of the banking system under the New Economy.

“SAFr further promotes effective supervision of BSP-supervised financial institutions and surveillance of the financial system,” BSP Governor Benjamin Diokno told reporters in an online briefing.

“The reform proved timely given the challenges brought about by the COVID-19 pandemic which has altered the way the BSP undertakes financial supervision,” he said.

SAFr is a risk-based supervisory framework that aims to facilitate a more robust, dynamic, and forward-looking assessments of BSP-supervised institutions. 

It aims to improve the assessment framework by further emphasizing business model analysis to identify drivers of risks; aligning supervisory strategies with the unique impact and risks of a BSFI; and applying prompt and calibrated enforcement actions. It also adheres to the principle of proportionality in supervision.

SAFr replaces rating systems earlier used by the BSP, including CAMELS (capital adequacy, asset quality, management, earnings, liquidity and sensitivity to market risks), the primary rating system for banks and quasi-banks; and ROCA (risk management, operational controls, compliance and asset quality), the rating system for foreign bank branches.

The adoption of SAFr is among the reforms introduced by the BSP in response to changes in the operating landscape brought about by financial innovation, deregulation, competition and advancements in information technology.

The industry was initially informed of the adoption of SAFr through a memorandum issued in March 2020.

Briefings and consultations were conducted for internal and external stakeholders, including various industry associations, to help them prepare for the adoption of SAFr.

Diokno said the revision of the implementation date of SAFr from July 1, 2020 to January 2021 allowed more time to roll out preparatory activities in view of the impact of the COVID-19 pandemic.

Topics: Bangko Sentral ng Pilipinas , BSP Governor Benjamin Diokno , Supervisory Assessment Framework , SAFr
COMMENT DISCLAIMER: Reader comments posted on this Web site are not in any way endorsed by Manila Standard. Comments are views by manilastandard.net readers who exercise their right to free expression and they do not necessarily represent or reflect the position or viewpoint of manilastandard.net. While reserving this publication’s right to delete comments that are deemed offensive, indecent or inconsistent with Manila Standard editorial standards, Manila Standard may not be held liable for any false information posted by readers in this comments section.
AdvertisementSpeaker GMA
Advertisement