FSF Makes Headway in Financial Sector Supervision
The Financial Sector Forum (FSF), an inter-agency body comprised of the Bangko Sentral ng Pilipinas (BSP), Securities and Exchange Commission (SEC), Insurance Commission (IC), and the Philippine Deposit Insurance Corporation (PDIC), in its meeting held on 27 April 2021, recognized the significant progress made by its working committees in the areas of financial sector supervision, financial technology (fintech), and consumer protection and financial literacy.
Bangko Sentral Governor and Chairperson of the FSF said that “The member-agencies of the Financial Sector Forum are committed to implement financial sector reforms to promote effective and seamless supervision across the financial sector. We will leverage on our cooperative arrangement to align standards and expectations and ensure that we continue to espouse an enabling environment towards an inclusive recovery and economic growth.”
Following the publication of the Financial System Stability Assessment (FSSA)1 prepared by the International Monetary Fund (IMF) relative to the completion of the Financial Sector Assessment Program (FSAP), the FSF took note of the inter-agency recommendations of the IMF aimed at promoting effective supervision in the financial sector. These recommendations cover gaps in legal power of financial sector supervisors related to bank secrecy laws and conglomerate supervision, which were also earlier cited in the joint IMF-World Bank assessment of the BSP’s Observance of the Basel Core Principles (BCPs) for Effective Banking Supervision.2 The results of the FSAP assessments will feed into the development of a strategic roadmap for the financial sector.
The member-agencies of the FSF also discussed the key activities that will be undertaken under the signed Memorandum of Agreement (MOA) on the establishment of Cooperative Oversight Framework on fintech innovation. In particular, existing regulations will be reviewed to harmonize baseline components and controls in the areas of customer onboarding and consumer protection across the financial sector.
In the said meeting, existing initiatives of the FSF to strengthen information exchange across agencies were also discussed cognizant that this is critical in strengthening risk surveillance activities in the financial sector. In addition, the member-agencies commit to continue the FSF’s work on conducting financial learning programs and producing related materials for varied segments of the market. In line with this, the FSF, in collaboration with the Commission on Higher Education (CHED), National Economic and Development Authority (NEDA) and Philam Foundation are designing a general elective course module which will cover basic concepts on financial management, banking, insurance, securities and digital finance to equip students with practical skills on making prudent financial decisions.
The work of the FSF is supported by five (5) multilateral committees namely, the (i) Supervision and Regulatory Policy Coordination Committee, (ii) Information Exchange Committee, (iii) Consumer Protection and Education Committee, (iv) Financial Conglomerate Supervision Committee, and (v) FinTech Committee. The FSF was established on 5 July 2004.