Perhaps more important, these concerns tend to ignore the behavioral effects that more-risk-sensitive regulatory capital ratios will induce. Earlier I noted the cyclical pattern that historically has characterized bank credit availability, a pattern exacerbated by the lack of formal and systematic credit-risk management.
We have issued regulations requiring banks to incorporate such principles into their operations. We are also among the early investors in the Bank of International Settlements’ Green Bond Fund and the Asian Green Bond Fund. The Philippine government did not let the unprecedented crisis go to waste.