Nov 14, 2012

Philippines - Standardized banking rules for Asean pushed

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The Bangko Sentral ng Pilipinas has called on its counterparts in Southeast Asia to start working on the standardization of banking regulations in the region to meet the goal of having a fully integrated Asean banking system by 2020.

BSP Governor Amando Tetangco Jr. said that under the plan, a bank in one Asean country would be allowed to operate in another member-country under the same terms and conditions that applied to local banks.

Tetangco said the standardization of banking regulations might sound ambitious, but starting the necessary work early would help the 10-member Association of Southeast Asian Nations realize the goal on time.

“Asian Banking Integration Framework (ABIF) is a major initiative in itself but with the aggressive timeline, it is an ambitious undertaking … But the world should not underestimate the resolve of the Asean leaders to pursue and achieve this desired architecture,” Tetangco said in a speech delivered for him by BSP Deputy Governor Nestor Espenilla Jr. during the membership meeting of the Asian Bankers Association.

He said harmonized regulations were necessary for the successful integration of the banking systems in the region. This is because with common regulatory systems, banks would feel more comfortable operating in foreign jurisdictions.

“Parity across jurisdictions is proposed under the ABIF so that banking becomes ‘cost and policy neutral’ between one Asean jurisdiction and another,” Tetangco said.

This year’s gathering of members of the ABA, which ran from Nov. 12 to 13 in Makati City, tackled the issues and trends concerning Asian banks, such as strategies needed to remain resilient amid the ongoing crisis in the euro zone and the role of banks in the integration of Asean economies, which will start in 2015.

Rajendra Theagarajah, outgoing chair of ABA, said in a press conference that the roadmap for the integration of Asean banks by 2020 had already been completed.



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