Geopolitical turmoil, cyberattacks top risks to financial stability
Geopolitical tensions, cyberattacks and global supply chain disruptions are among the key risks financial institutions are watching closely, a central bank-led government group said.
The risks were identified in the annual Survey of Salient Risks by the Financial Stability Coordination Council (FSCC), which gathers views on threats that could affect the financial system over the next 12 to 24 months and over a longer horizon of three to six years.
In a statement on Tuesday, the council said identifying risks early would help financial authorities and market participants strengthen safeguards, refine contingency plans and limit the impact of shocks on households, businesses and financial institutions.
The FSCC, which coordinates efforts to monitor and manage systemic risks in the Philippine financial system, is composed of the Bangko Sentral ng Pilipinas (BSP), Department of Finance, Insurance Commission, Philippine Deposit Insurance Corp. and Securities and Exchange Commission.
At its Sept. 2 meeting, the council said the Philippine financial system remained resilient despite a challenging global environment, citing sound capital and liquidity positions and prudent risk management.
These buffers allow financial institutions to continue providing credit to households and businesses, it said.
“Global risks remain elevated, with geopolitical tensions in the Middle East and volatile financial markets. Nonetheless, our financial system remains well-positioned to absorb shocks,” FSCC Chair and BSP Governor Eli Remolona Jr. said.
The council said it was also taking steps to strengthen its ability to detect emerging vulnerabilities and improve the capacity of the financial system to withstand potential shocks.
These include closer monitoring of nonbank financial intermediaries, as well as better data collection and information sharing among FSCC members.
The council is also strengthening its assessment of risks arising from liquidity, leverage, concentration, interconnectedness and the links among banks, nonbank financial intermediaries, corporations and financial markets.
