The Bangko Sentral ng Pilipinas (BSP) will begin implementing stricter capital buffer requirements for banks under a new framework aimed at strengthening the country’s financial system.
Under BSP Circular No. 1235 dated May 20, banks will now be required to build additional capital buffers even during periods of normal credit growth through the Countercyclical Capital Buffer (CCyB) framework.
The BSP said the measure is designed to help banks build reserves during stable economic conditions, allowing the central bank to ease requirements during financial stress or economic downturns to support continued lending.
The central bank also adopted a “positive neutral rate,” allowing the CCyB to be activated even outside periods of elevated financial risk.
According to BSP Governor Eli Remolona Jr., the reform aims to strengthen financial stability while allowing banks to respond more effectively during economic shocks.
The CCyB framework was first introduced under Basel III reforms following the 2008 global financial crisis, although it remained inactive locally since being adopted in 2018.
The new rules will be implemented gradually. Universal banks, commercial banks, and quasi-banks will have one year to comply, while digital banks will have two years.
0 Comments
Leave a Reply