tightly than risk - weighted measures for a number of banks that met their risk weighted capital ratios but that subsequently failed. the debate about the relative merits of risk weighted capital controls versus un - risk - weighted controls like the leverage ratio has in my view become too hung up on the question of backstops and frontstops – on which constraint should bite first. this is an unhelpful way to look at the issue. risk - weighted and non - risk - weighted measures protect against different risks. the leverage measure is there to manage model risk, which can be very significant. which of the two ratios binds first depends on the kind of risks that banks are running. the leverage ratio automatically places tighter limits on expansions in the balance sheet through supposedly low - risk assets. the international community has made progress on the leverage ratio. the definition guiding how it should be calculated was agreed at the start of this year. this will provide the basis for banks to disclose the ratio over the next 3 years in the light of which the international community will decide in 2017 on the calculation of a minimum standard. a number of authorities, including the us, the netherlands, and the swiss, have already introduced or are considering a leverage ratio in advance of the international standard. in the uk, the prudential regulation authority has already asked the eight major uk banks and building societies to take steps to achieve a leverage ratio above 3 %. the financial policy committee has been asked by the chancellor to review whether a leverage ratio framework should be introduced in advance of the international framework. this could include a power for the fpc to vary the ratio to counter macro - prudential risks. the fpc will consult on the review and expects to publish its conclusions towards the end of the year. there is also important work underway to ensure the risk - weighted framework is robust. reviews are underway to build a credible standardised approach to calculating risk - weights for banks ’ trading activities and their loan books ; this too should help reduce the system ’ s exposure to model risk. the other key element of the capital and liquidity regime to be agreed is the net stable funding ratio. this standard addresses banks longer - term liquidity risks. proposals are currently out for consultation and the basel committee aims to agree the standard in september this year. concerns have been raised by some in the industry that taken together, the main elements of the new capital and liquidity regime can interact to have potentially serious and unwelcome unintended consequences particularly

amando m tetangco, jr : continuing growth amidst recurrent risks and uncertainty speech by mr amando m tetangco, jr, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the joint meeting of the rotary club of manila and the rotary club of makati - forbes park, manila, 9 january 2014. * * * rotary club of manila ( rcm ) president rudy bediones, rotary club of forbes park ( rcfp ) president ruben torres, other officers and members of rcm and rcfp, ladies and gentlemen, good afternoon. thank you for the invitation to be part of the joint meeting of the rotary club of manila and the rotary club of forbes park. it ’ s always a privilege to be included in your new year tradition and your celebration of the rotary awareness month, which i understand is commemorated in all rotary clubs across the globe. today isn ’ t really the first thursday of the year, which is when you normally invite me to speak. but january 2 would have been too close to new year ’ s day, and most of you would still have been in the holiday mood. today, i think everyone is on rev mode and ready to tackle the challenges of 2014. quite a few things happened in 2013 that have elevated the potential challenges of 2014. of these, the one most felt by the country is the trilogy of natural and man - made events – the earthquake in bohol and cebu, the armed conflict in zamboanga and from yolanda – which we experienced in the second half of 2013. while these three events literally changed the landscape of the country, i think these events also, in the process, showed the best in the filipino – our resilience and how we are at our very best when we work together. in this spirit of working together, the bsp also did its part to help ease the impact of yolanda by putting in place regulatory relief for banks in the affected areas, so they could extend the same to their customers. among others, the temporary relief measures include the following : for all banks allowing banks to provide financial assistance to their officers and employees who were affected by the calamity including those types of assistance that may not be within the scope of the existing bsp - approved fringe benefits program. for thrift banks / rural banks / cooperative banks : excluding existing loans of borrowers in affected areas from the computation of past due ratios provided these