Likewise, the Framework prompts banks’ board and senior management to take a broader view on risk management by looking beyond the traditional sources of financial risks. In relation to this, broad principles on environmental and social risk management are set out in BSP Circular No. 1085.
In this context, it must be emphasized that even if global imbalances and accommodative monetary policy provided an enabling environment for excessive leverage and risk taking, it was still the responsibility of regulators and supervisors to have taken appropriate macro-prudential measures, preemptively and proactively, rather than reactively.