amando tetangco : of central banking, art and legacies speech by mr amando m tetangco, jr, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the launching of the books “ philippine central banking : a strategic journey to stability ” and “ likha : enduring legacies of filipino artistry ”, the decorative arts collection of the bangko sentral ng pilipinas, manila, 25 may 2017. * * * the members of the monetary board of the bsp thank all of you for accepting our invitation to the launching of two important books. the first book “ likha : enduring legacies of filipino artistry ” celebrates our heritage by showcasing the decorative arts collection of the bangko sentral ng pilipinas which includes artifacts from 2000 years ago. both functional and aesthetically pleasing, the decorative art pieces include intriguing prehispanic pottery, finely crafted hispanic gold, expressive religious art, exquisite embroidery and cleverly designed furniture. they provide insights into our evolution as a nation and instills a strong sense of identity as a people. these enduring works of art are testaments to the artistry, creativity, adaptability, strength, competitiveness and tenacity of our people. they make us proud to be filipinos. this is important. in this time of globalization, it is important that we do not lose sight of who we are as a people, what we have achieved and what we can achieve. the second book “ philippine central banking : a strategic journey to stability ” looks at the core aspects of central banking from the point of view of professional central bankers with broad and deep experience in the science and the art of central banking. the two books represent very different disciplines. if you look around this hall therefore, you will see that aside from bankers, there are quite a number of individuals from diverse fields. many would probably think that central banking and the arts share little in common. to us, however, both are linked by their capacity to reflect the story of our past. this is important. at the bsp, we believe that history must inform our country ’ s journey ; we must learn from the past so that we will be better and stronger for the future. for this reason, the bsp has a continuing program to share information, document its learnings and promote appreciation of our country ’ s rich culture and history across the country. thus, these two books are

improved transparency which enables better decisions ; vi ) enhanced relationship with regulators and other stakeholders and vii ) enhanced valuation among investors ; in a stress tests survey conducted by banks, it was observed that compliance can have some business benefits. over a third of bankers who have undergone the stress testing program indicated that top benefits of complying with stress testing principles are better informed capital planning decisions, and maintaining 2 a forward - looking view of the organization ’ s risks. https : / / www. pm360online. com / silver - linings - 10 - business - benefits - of - your - compliance - program / https : / / www. forbes. com / sites / tomgroenfeldt / 2014 / 08 / 19 / compliance - efforts - can - bring - business - benefitsfor - banks / # 2b5b69f6772c we, therefore, need to embrace compliance if we want customer satisfaction which eventually leads to better return on equity. costs of poor compliance culture compliance risk is the risk of legal or regulatory sanctions, material financial loss, or loss to reputation a bank may suffer as a result of its failure to comply with laws, regulations, rules, related self - regulatory organization standards, and codes of conduct applicable to its banking activities. on the other hand, an effective process would identify compliance risks in each business line, product and process, and devise ways to mitigate such risks. the processes and requirements should be properly documented with a list of do ’ s and don ’ ts accompanying the same. the instances of failure to adhere to proper conduct should be converted into case studies and disseminated among the staff for education and entrenchment of desired attitudes. banks should eschew the tendency to treat compliance merely as cost and should recognise that proper conduct saves the bank from possible reputational loss and penalties – thus, generates hidden earnings which most banks do not quantify, and hence do not realise. a poor compliance culture may lead to heavy costs to the banks. globally, from the beginning of the financial crisis and until 2020, penalties and fines on banks is are expected to top usd400 bn. quinlan and associates, a hong kongbased financial services consultancy estimated that bad behaviour had erased $ 850 billion in profits for the top 50 global banks since the 2008 financial crisis in the form of write - downs, trading losses, fines and higher compliance costs 3. from june 2018 to july 2019, the reserve bank has imposed monetary penalties on