The enactment of the FIST Law will assist the financial system perform its role of efficiently mobilizing savings and investments for the country’s economic recovery as well as its sustained growth and development. The banking system has built-in buffers which provide it with the capacity to internalize losses on their exposures as well as continue with their lending and investment activities.
There is, however, a limit to this risk-bearing capacity of FIs; thus, the establishment of resolution frameworks, such as the FIST Law, will ensure that distressed FIs have a mechanism to strengthen their balance sheet. The enactment of the FIST Law can help ease banking system stress through a jointgovernment and private sector undertaking.