had to backstop certain markets. secondly, covid infection rates are on the rise again in many countries. restrictive measures have been re - introduced, and uncertainty is increasing. this is bad news for the economy. the fiscal and monetary stimulus packages have until now cushioned part of the blow. but as the economic slump drags on, firms and households will start feeling the impact more and more. in such an environment, insolvency rates will increase. that ’ s simply inevitable. that means that banks, while having initially done well, are going to take hits to their loan books. unfortunately, this happens while the banking sector in at least some countries in europe is still struggling with npls from the previous crisis. how big the hit will be is still very uncertain. yet it would be wise for both policymakers and banks to brace for impact. if this is the case, what should policymakers do now? in the short term, i think it ’ s important governments and central banks continue to support the real economy as long as necessary. it is inevitable and only right that this support will be gradually halted. but now is not the time to phase out the fiscal and monetary stimulus. where possible, fiscal policy should move from general support to more targeted investment, aimed at supporting the transition to a carbon - neutral economy and digitization. next, supervisors should continue to give room to the banks to use their capital buffers. capital buffers are the airbags of the financial system and we should use them in a crisis. that is after all what they are there for. of course, the dilemma is : how much? here we have to weigh the need to cushion the current blow against the need to also be ready for future headwinds. what can the financial sector do? focusing here on banking for a moment, i would say : do what you normally do. ensure credit keeps flowing to the real economy. make use of the available headroom to do so. make sure capitalization remains at prudent levels. and very important : keep a keen eye to risks and asset quality. now this may sound like the basics of banking. but i recognize it is hard to stick to the basics in these increasingly challenging circumstances. as more firms face mounting financial troubles, banks will need to re - focus on the long - term viability of their corporate customers. sometimes debt restructuring may be part of the solution. government support and low interest rates may provide a helping environment here

amando m tetangco, jr : steer toward true north speech by mr amando m tetangco, jr, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the awarding ceremony for “ map management man of the year 2015, makati city, 24 november 2015. * * * they say receiving the map management man of the year award is like winning best director in the oscars … when i look at the roster of past winners … i guess they have a point … but also, when i look at the roster, best director for a particular film pales in comparison … because everyone before me had been judged for the consistency in his whole body of work … and so it is with pride and, at the same time, humility that i address you this afternoon … since i became bsp governor in 2005, a frequently used idiom to describe my position is that i am “ at its helm. ” i find this analogy to an ocean - going vessel very appropriate, both from the technical and from the operational - management side of central banking. central banking has, after all, often been described as a navigational act of directing … easing, tightening, reining - in … balancing. slight changes on the wheel can alter the ship ’ s direction. thus, captain and crew must be in sync. with this in mind, for the last 10 years, 4 months and 20 days i have approached my duties with great respect : first, i must know the course with certainty. many navigational tools can be consulted for geographical direction. in my readings, i learned that the compass is limited. it often does not point to “ the true north ” that does not change. rather, it directs to a magnetic north that varies because of fluctuations in the earth ’ s fields. thus, for accurate direction one must know where the “ true north ” is. for the bsp, our true north is spelled out in our mandates. we are committed to maintaining price stability ; a stable banking system ; and a safe, sound and efficient payments and settlements system. we choose the course that leads to them despite possible trade - offs or even criticism, sometimes, lawsuits. in this commitment, we value our independence as we cannot be carried by changing currents or tossed by the waves. our direction determines our destination. let me first talk about adherence to our second mandate. something about going through a crisis makes one think long and