The Bangko Sentral ng Pilipinas (BSP) reminded small banks, particularly those classified as thrift banks, that implementation of Basel 1.5 is set to begin on Jan. 1, 2014, the same period when Basel 3 takes effect.
Basel 1.5 is a global initiative that aims to strengthen banks liquidity, risk management capability and stress standards.
It was formulated alongside the higher standard Basel from 2010 to 2011.
As of June 30, 2012, there are 75 thrift banks all over the country, including the latest ones Queenbank and Wealthbank, that both opened in 2010.
Queenbank is majority owned by Roger Florete of Bombo Radyo while Wealthbank is majority owned by Gaisanos, a mogul in mall business.
Unlike in Basel 3 where banks are required to hold 4.5 percent instead of two percent of common equity and six percent of Tier I capital, up from four percent, of risk-weighted assets (RWA), there is no buffer increase for Basel 1.5.
“Smaller banks are not covered by Basel 3. Only universal and commercial banks and their subsidiaries will be covered. For the smaller banks, the prescribed standard is Basel 1.5 which is more appropriate for their operations,” BSP deputy governor for supervision and examination sector Nestor Espenilla explained to the Daily Tribune.
BSP to thrift banks: Basel 1.5 starts 2014
- Written by Ed Velasco
- Tuesday, 31 July 2012 00:00
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