|
THE
growing complexity of the local financial market, best
shown by the string of failures of financial
institutions the past many years, has boosted support
for the creation of a super regulatory body, an advocacy
group said on Wednesday.
The
super body fuses the powers of such regulators as the
Securities and Exchange Commission, the Philippine
Deposit Insurance Corp., the Insurance Commission and
the Bangko Sentral ng Pilipinas into one agency.
But
while there is fragile agreement on the need for one,
“opinions differ on whether financial supervisory power
should be lodged in the BSP,” the Economic Policy Reform
and Advocacy or Epra reported.
Epra is
an advocacy group with roots originating from the Ateneo
de Manila University.
BSP
deputy governor Nestor Espenilla ruled out support from
the monetary authorities for such a super body. He said
it was better if the interagency consultative body
called the Financial Sector Forum were to exercise the
regulatory aspect of the change with the BSP retaining
full monetary authority.
And even
then Espenilla was unsure this would work as the plan
requires changing not just the charter of the BSP but
the Constitution itself.
The
Constitution vests upon the BSP dual mandate of monetary
and supervisory authority over the entire financial
system.
“The
most direct approach to the issue is not very
practical,” Mario B. Lamberte, team leader of the
government-backed consultancy group EMERGE told
reporters.
EMERGE
is conducting studies aiming to harmonize or integrate
the functions of Philippine financial Regulators. The
studies are funded by the United States Agency for
International Development.
He said
unifying the supervisory and regulatory roles of
existing agencies under one roof have equally compelling
arguments for and against them.
Those in
favor say the financial superbody allows for better
monitoring of issues affecting the entire system and can
rapidly respond with appropriate policy changes; those
against it retort the merger could result in lower
supervisory effectiveness during and possibly even after
the changes, for instance.
While
the pros say the unified boy strengthens the
accountability of supervisors, those against it point
out a poorly communicated objective can lead to moral
hazards across the entire financial sector. |
