A step towards this goal is the issuance of the guidelines on Pillar 2 of the Basel 2 capital adequacy framework or the Internal Capital Adequacy Assessment Process (ICAAP) and the Supervisory Review Process (SRP).
This would give the BSP a better handle on how well the board of directors and senior officers understand their own risk management systems and capital allocation policies, as the ICAAP is bank-determined and should provide rules for implementing the bank’s risk appetite.