Monetary Board adopts new Basel III standardhome/Business/Top Business/Monetary Board adopts new Basel III standardMonetary authorities have adopted a new macroprudential tool that will ensure the continued flow of credit in times of industry-wide stress, the Bangko Sentral ng Pilipinas (BSP) announced on Thursday. The Monetary Board has approved the adoption of the Basel III standard known as the Countercyclical Capital Buffer (CCyB), which will apply to universal and commercial banks (U/KBs) as well as their subsidiary banks and quasi-banks using their Common Equity Tier 1 capital, according to a December 6 BSP circular. The CCyB will initially be set at zero percent but is subject to upward adjustments, as determined by the Monetary Board when systemic conditions warrant, not exceeding 2.5 percent. During periods of stress, the Monetary Board can lower the CCyB requirement, effectively providing affected banks with more risk capital to deploy. Any increase in the CCyB rate take effect 12 months after its announcement, but when the buffer is reduced it will take effect immediately.

Source: Manila Times December 13, 2018 22:41 UTC