BSP to Publicly Disclose Erring Banks and Financial Institutions

To promote transparency and market discipline and deter banks from misbehaving and protect the public interest, the Bangko Sentral ng Pilipinas is planning to make public the enforcement actions and criminal cases against erring banks and other supervised entities.

According to BSP Deputy Governor Chuchi G. Fonacier, the move is something new.

“We had a study on this. So, it just has been completed. But we’ve been thinking about this before,” she says.

Fonacier refers to the proposed framework of the BSP’s Financial Supervision Sector for the publication of the administrative enforcement actions by both the FSS and the Office of the General Counsel and Legal Services (OGCLS) to discourage rule breakers and unacceptable behavior.

Bangko Sentral ng Pilipinas

It will disclose information such as administrative cases filed by the BSP against erring supervised financial institutions and their directors, officers, and employees (DOEs); after filing of a criminal complaint with the Department of Justice; criminal cases against erring DOEs, after determination of probable cause by the DOJ and upon the filing of information in trial courts; and criminal convictions of accused DOEs by the trial court, regardless of whether the judgment has attained finality.

Statistical summary of enforcement actions

The proposed Statistical Summary of Enforcement Actions will be published annually and contain enforcement actions administratively imposed by the FSS on BSFIs and their DOEs. It will contain the following information: the number of monetary penalty impositions and the amount of monetary penalties assessed and collected; and the number of non-monetary enforcement actions imposed on BSFIs and their DOEs, classified according to the type of enforcement action.

Bangko Sentral ng Pilipinas

“This is a way to inform the public and the industry of the consequences of the failure by concerned BSFIs and directors, officers, and employees in meeting the BSP’s requirements and expectations on good corporate governance, sound risk management, and prudent banking operations,” Fonacier says.