benjamin e diokno : macroprudential policy strategy framework the case of the philippines opening statement by mr benjamin e diokno, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the public release of the macroprudential policy strategy framework : the case of the philippines, 22 july 2020. * * * good morning to all our friends from the financial market, multilateral agencies and the media. three weeks ago, the fscc held a press briefing with two important messages : first, that 2019 coronavirus disease ( covid - 19 ) is different from prior crises because it is a direct shock to the real economy, to supply chains, and to the welfare of families and individuals. second, based on our reading of a wide array of indicators and our own surveillance of what is happening on the ground, we do not see any indications as of yet that our financial market has been impaired irreparably. as the council convened after the global financial crisis, our task has always been about ensuring the health of the financial system so that it remains a pillar for the financial consumer. financial authorities have come to understand that there is something about the risk behaviors of various financial market stakeholders that creates outcomes for the system that cannot be tracked by simply overseeing the balance sheets of individual market stakeholders. as i mentioned at our last press briefing, that “ something ” is the way risk behaviors connect, complement, and correlate with each other, creating new channels of risks through contagion. today, the council is again with you to share another milestone. just as we had the opportunity three weeks ago to launch the financial stability report on its maiden semestral release, we have invited you today for the public release of the country ’ s macroprudential policy strategy framework. that is a bit of a tongue - twister but at its core, the framework reflects how your financial authorities define systemic risks, how we are monitoring changes in risk behaviors, and how we are moving forward in managing this policy concern. the overarching concern is that of financial stability which is specifically about managing systemic risks. these risks, in turn, are specifically defined, consistent with global understanding and practice. and the means for taking action are what we refer to as macroprudential policy. to help put all of the different components, the framework document includes a scoping statement that defines the perimeter of our work on systemic risk management.

the uk ’ s political turmoil. as we know from international negotiation theory, a leader can use domestic dispute as a negotiation resource, arguing that she cannot move any further because she has no room for manoeuvre at home. that ’ s why it was necessary for eu leaders to call for the uk to deliver soon in order to move on to phase two in december. in sum, then, the state of negotiations has to be taken seriously – but there is no reason to panic. why not?, you may ask, as the outlook seems quite dramatic. there are two reasons. first, the process we are witnessing is not that unusual for complex political negotiations – they take time, and in the beginning both sides typically weigh up their options and their opponents first. thus, it is often the case in such negotiations that concrete results only become visible shortly before the deadline. that it takes time is also quite sensible, seeing as a lot is at stake. the decisions taken will influence uk - eu relations for decades ; moreover, they will have a lasting impact on global supply chains and geopolitical constellations. the second reason why we need to keep calm is that the uk government is apparently ready to compromise. while prime minister may ’ s speech in january was widely perceived as indicating a hard brexit – ( quote ) “ no deal is better than a bad deal ” ( unquote ) – her tone and stance have softened in the meantime. this was clearly signalled in her florence speech. we now know that the uk government aims to strike an ambitious free - trade deal and reach a customs agreement. in exchange, they are prepared to offer permanent residence for eu citizens and a clear budgetary commitment regarding their liabilities. overall, therefore, the chances of reaching a deal might be better than they appear at the moment. 4 hope for the best, but prepare for the worst given this calm assessment of mine, some may conclude that firms could simply sit back and wait. nothing could be farther from the truth. let me explain why, by focusing on the financial services sector. what will the impact of brexit be on financial institutions? financial institutions should prepare for the worst case – that is, a “ no deal ” scenario – with a disorderly exit of the uk in march 2019. as daunting as it seems, this “ no deal ” scenario is – if we take a positive view – luckily, quite clear ; there will be no surprises. wto rules