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Bangko Sentral lays down new rating framework for lenders

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Bruce Rodriguez, ABS-CBN News

<div class="embed-wrap"><figure data-feedback="fb:likes,fb:comments"><img src="https://sa.kapamilya.com/absnews/abscbnnews/media/2017/business/01/11/bsp-011117.jpg"/></figure></div>MANILA – The Bangko Sentral ng Pilipinas has put in place a new rating framework for the financial institutions under its supervision as it seeks to boost the stability of the local banking system amid the COVID-19 health crisis.After delays caused by the pandemic, the Bangko Sentral ng Pilipinas (BSP) started implementing its new Supervisory Assessment Framework (SAFr) this year.“The reform proved timely given the challenges brought about by the COVID-19 pandemic which has altered the way the BSP undertakes financial supervision,” said BSP Governor Benjamin Diokno. “SAFr further promotes effective supervision of BSP-supervised financial institutions (BSFIs) and surveillance of the financial system.&quot;It will replace the rating systems earlier used by the BSP, which include CAMELS (capital adequacy, asset quality, management, earnings, liquidity, and sensitivity to market risks), the primary rating system for banks and quasi-banks as well as ROCA (risk management, operational controls, compliance and asset quality), the rating system for foreign bank branches in the country. The new framework will also be forward-looking in terms of assessing the risk elements of a bank and other financial institutions, unlike the old systems which relied on reports about past performances.&quot;SAFr will help enhance the stability of the banking system under the new economy,&quot; Diokno said.&quot;The adoption of SAFr is among 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,&quot; Diokno explained.The Monetary Board approved SAFr last February 27, and the BSP initially announced its adoption through a memorandum issued in March 2020. &quot;As part of preparatory activities, briefings with industry associations were held to apprise the banking industry on changes on the supervisory framework. Also, a review of other existing frameworks, such as licensing and enforcement, is being done to harmonize the same with the features of the SAFr to the extent possible,&quot; Diokno said.

The Bangko Sentral ng Pilipinas has put in place a new rating framework for the financial institutions under its supervision as it seeks to boost the stability of the local banking system amid the COVID-19 health crisis.

The Bangko Sentral ng Pilipinas has put in place a new rating framework for the financial institutions under its supervision as it seeks to boost the stability of the local banking system amid the COVID-19 health crisis.

Bangko Sentral lays down new rating framework for lenders

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Bangko Sentral lays down new rating framework for lenders

Bruce Rodriguez,

ABS-CBN News

Published Jan 07, 2021 06:24 PM PHT

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Bangko Sentral

central bank

SAFr

bank rating

banking

finance

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