Bangko Sentral ng Pilipinas (BSP) Governor Felipe M. Medalla co-chaired the recent virtual meeting of the Regional Consultative Group for Asia (RCGA). The RCGA is one of the six regional committees created by the Financial Stability Board (FSB), an international body based in Basel, Switzerland.
In its 22nd meeting, the RCGA discussed financial stability issues affecting the region, including rising commodity prices, the effects of tightening global financial conditions as well as enhancing cross-border payment systems.
“Our recovery from the COVID-induced recession has been challenged by significant global conditions in 2022. While we expect global rates to rise, exchange rates do rebalance, there remains so much uncertainty about the depth and breadth of potential contagion effects. The task now is to manage systemic risks,” said Governor Medalla.
Beyond market volatilities, the participants likewise discussed how cross-border payment systems can be strengthened. The FSB then presented its general work program related to crypto-asset markets, decentralized finance, climate change risks as well as the resilience of non-bank financial intermediaries.
“The issues are clearly global, but we have to address these first at the domestic level. The RCGA plays an important role by consolidating the various domestic views so that we can ask the question “what do all of these mean to Asia?” Forming that collective voice is critical to effectively addressing the shared challenges,” Governor Medalla explained.
In his closing remarks, the Governor highlighted that he expects much to unfold before 2022 ends. “Our task is to anticipate and prepare for the reasonable scenarios of ‘what may be.’ That is difficult as it is, but it is particularly more challenging under current market conditions,” concluded the Governor.
The RCGA has members from national authorities in 17 jurisdictions in Asia. The FSB is an international body that monitors and makes recommendations about the global financial system, in line with the promotion of international financial stability.
Governor Felipe M. Medalla co-chairs the FSB-RCGA with Deputy Governor M. Rajeshwar Rao of the Reserve Bank of India. He will continue to co-chair the FSB-RCGA until June 2023. ###