The Philippine and Thai central banks have signed a memorandum of understanding (MOU) to foster greater cooperation on banking supervision between the two countries.
The MOU signed last Sunday by Bangko Sentral ng Pilipinas Governor Nestor A. Espenilla Jr. and Bank of Thailand Governor Veerathai Santiprabhob “serves as a solid foundation for effective supervision of banking institutions operating in both countries in accordance with the principles set out in the Basel Core Principles for Effective Banking Supervision.”
In a joint statement, the two central banks also said: “The MOU sets out in greater detail the two authorities’ commitment to fostering greater information exchange and cooperation in the areas of licensing, on-site examinations, supervisory colleges, and crisis management.”
In April, former BSP Governor Amando M. Tetangco Jr. and Santiprabhob also signed a letter of intent (LOI) to start bilateral discussions towards allowing the entry of so-called qualified Asean banks (QABs) in each country.
Tetangco previously said that the LOI “formalizes our intention to eventually craft the specific provisions that will govern the entry of QABs between our two countries.”
“The bilateral discussion allows us to explore opportunities as well as common interests and the BSP looks forward to having vibrant discussions with our colleagues from the BOT,” Tetangco also had said.
The BSP defines QABs as “strong and well-managed banks, headquartered in Asean and majority owned by Asean nationals.”
ABIF, approved by Asean member-states in 2014, allows QABs to have greater access to neighboring markets as well as more flexibility in their operations there.
According to Asean’s website, “ABIF recognizes that some countries are more ready than others to further open up their banking sector… Hence, the current focus is on pursuing bilateral reciprocal arrangements.” /kga
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