The central bank has given banks more leeway to ride out coronavirus disease 2019 (Covid-19) pandemic crisis by allowing them to utilize their capital and liquidity buffers. “In view of this, a covered bank/QB is expected to integrate these regulatory flexibilities into its internal policies and processes to ensure that the buffers are efficiently utilized, as necessary,” Fonacier said. She emphasized that a covered bank/QB that draws down its 2.5-percent minimum capital conservation buffer will not be considered in breach of the Basel III risk-based capital adequacy framework. After the pandemic crisis, these financial entities will be given by the central bank a reasonable time period to restore their buffers. Meanwhile, non-compliance by a covered bank/QB with the minimum risk-based capital adequacy ratios and the minimum 100-percent net stable funding ratio as a result of the Covid-19 situation will be handled on a case-by-case basis by the BSP.

Source: Manila Times May 04, 2020 16:36 UTC