Thailand, RP back banking supervision under central bank

Central bankers of Thailand and the Philippines are backing Bank Indonesia to retain its control over banking supervision, amidst the finalization of discussions on the nation’s proposed financial superbody, the Financial Services Authority (OJK), which will take banking supervision functions away from the central bank.

Bank of Thailand’s former governor Tarisa Watanagase said on Thursday that the central bank “should be the supervisor of the major financial sector, if not all major sectors in the economy”.

“If something goes wrong, it could be a big problem for the entire economy ... Being the policy maker for monetary policy, [the central bank] will be able to have a holistic view of the economy, the real economy and the financial sector, and see what policy or measure is needed,” she told reporters on the sidelines of a Southeast Asian central bankers meeting in Jimbaran, Bali.

Nestor A. Espenilla, deputy governor of the Philippines' central bank for supervision and examination, said “it’s highly desirable that banking supervision is with the central bank”.

“Changing legislation is always a difficult task. I think the pragmatic approach is to intensify dialogs amongst the financial regulators,” he said, commenting on the nation’s OJK draft bill. (est)