In some cases, this created results that could not be relied upon for the implementation of Basel II. For example, for some portfolios, losses reflected only the last year or two of results. Thus, the strong credit performance of recent experience was not balanced by higher losses at other points in the credit cycle.
In addition, the peso’s strength is largely fundamentally supported. So, official BSP action should only be to reduce excessive volatility in the rate movements. Capital flows are fickle and crafting monetary policy to address them is even trickier. It seems quite simple to prescribe monetary easing.