U.S. banks collapse no impact on local system

Photo | AFP

The recent bank collapses in the United States and other recent developments in the US financial system has no significant or material impact on Philippine banks, the Bankers Association of the Philippines assured the public on Tuesday.

BAP made the assurance after several American banks, including the Silicon Valley Bank and Signature Bank collapsed in the United States.

“Banks have diversified deposit bases that include all sectors of the Philippine economy, allowing them (to provide the liquidity needs of their clients continuously),” BAP said.

“The Philippines continue to have capital and liquidity ratios that exceed requirements set by the Bangko Sentral ng Pilipinas,” it added.

According to the BAP, the prudential measures implemented by the BSP provide necessary support allowing the Philippine banking system to withstand economic shocks.

Stronger financial system

The BAP added that it continues to work with BSP and other stakeholders to pursue reforms that will lead to an even stronger financial system that sufficiently provides the financial needs of the banking public.

Silicon Valley Bank became the biggest bank to fail since the financial crisis of 2008 on Friday.

Regulators also abruptly closed down Signature Bank last Sunday night to stop a crisis in the larger financial system.

The sudden shutdown of the banks shocked Wall Street, Washington, and the tech sector.

Stock markets declined worldwide on Monday due to investors’ concerns regarding the repercussions of the collapse of SVB.

On Monday, US President Joe Biden reassured the American public about the nation’s financial system as other US institutions and significant European lenders were hit amid contagion fears.

and Kathryn Jose

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