The Gov. Jose B. Fernandez, Jr. Center for Banking and Finance of the Asian Institute of Management, in cooperation with the Professional Risk Managers’ International Association (PRMIA) Philippines held a Risk Management Forum last August 19, 2011 at the AIM The Forum was entitled "ICAAP Encounters:  Looking Back and Moving Forward.”

Bangko Sentral ng Pilipinas Deputy Governor Nestor A. , Jr., Head of Supervision and Examination Sector was the Resource Speaker.  Deputy Governor Espenilla expanded on the Internal Capital Adequacy Assessment Process (ICAAP) implementation and supervision, adopting the perspective of the regulators and banking industry. 

He gave an overview on: a) general evaluation of the banks’ compliance on ICAAP requirements and submission of ICAAP documents, including key observations and points for improvement, b) insights on the actual ICAAP implementation of banks, as a result of recent bank examinations which already covered ICAAP and c) ICAAP supervision roadmap in the context of the broader Basel II adoption.

Ms. Sofia C. Ladores, Assistant Vice-President and Head – Credit Risk and Basel II Implementation Division, Philippine National Bank and Ms. Teresita E. Cheng, Senior Vice-President and Chief Risk Officer, Land Bank of the Philippines were the two Panelists.  They gave an overview of their respective banks’ ICAAP policies, dealing on development and implementation process for their respective banks’ ICAAP, including their interaction with the BSP and internal stakeholders;  positive impact and major challenges encountered by their banks in complying with the relevant ICAAP requirements; and,  high-level ICAAP implementation roadmap.

The event was attended by more than 140 participants, mostly from the banking sector.

The JBF Center In coordination with the Philippine Representative Office of the International Monetary Fund (IMF), held a forum last November 4, 2011 at the Soriano – Velasco Room, Asian Institute of Management. The Guest Speaker was Mr. Naoyuki Shinohara, IMF Deputy Managing Director who gave a lecture on “Asia-Pacific Regional Economic Outlook: Navigating Uncertain Global Environment”. 

Mr. Shinohara’s lecture can be summed up in the following perspectives; the global economy is in a dangerous phase, with a weaker outlook for growth and rising risks. Negative feedback loops between the real economy and the financial sector have arisen. And unemployment in advanced economies remains very high. The perspective is a little different in Asia, but Asia is also vulnerable to the developments in other regions, especially through the trade channel. And emerging Asia is not immune from a risk of financial contagion, either.

His conclusions are emphasized on some key policy challenges against the current background of heightened global uncertainty. 

The Euro Zone leaders have taken steps toward addressing the crisis in their countries, but important details that still need to be elaborated and implementation will be key. Until then the risks of adverse feedback loops from deteriorating global economic and financial conditions will remain very real. Policymakers must build on recent positive progress in Europe to decisively forestall a downward spiral of unsustainable debt dynamics, dysfunctional financial markets, falling demand, and rising unemployment. At the same time, in the US, important policy steps are needed to repair household balance sheet, which is key to that country’s full economic recovery.

•  The main challenges for Asian policymakers going forward are to support activity in a fragile global setting, while ensuring that growth is of the right “quality”. The renewed weakness in advanced countries highlights the need to rebalance to reduce vulnerability. Policies to do so will also lead to more equitable growth.

•  In the near term, against the backdrop of unusual uncertainty, a pause in the pace of tightening may be warranted in countries where inflation, and more generally, overhearing pressures are under control. Allowing stronger exchange rates would give more room to monetary policy to pause, as it would help contain remaining inflationary pressures, but would also help rebalancing growth by sustaining domestic demand.

The forum was well attended with more than 80 executives from the business and government sectors as well as economic-oriented NGOs and management associations. The full PowerPoint presentation by Mr. Shinahora is available at this web site. click here to download

Executive Director, AIM-Gov. Jose B. Fernandez, Jr. Center for Banking and Finance
and Member, Board of Trustees – Asian Institute of Management

QUARTERLY RISK MANAGEMENT FORUM: OPERATIONS RISK AND CAPITAL ALLOCATION UNDER THE ADVANCED APPROACH OF BASEL 2
Resource Person: Mr. Simon Lee, Head, Risk Tech Asia Pacific
September 26, 2008, TPIC-Bancom Rooms, 3rd Floor, AIM Bldg., Makati City, PHILIPPINES

Speech