The Basel Committee has attempted to reduce procyclicality effects in the new framework, incorporating factors such as estimates of loss severities that focus on downturns. These are wise decisions intended to obviate the need for institutions to raise large amounts of capital at the trough of a downturn - something that can be quite difficult and add to financial market instability.
And my commitment as Governor of the Bangko Sentral is for there to be continuity in the policies that brought about this favorable economic environment, with space for improvements through bold and strategic financial sector reforms. 1. Increasing gross domestic product - Developments in 2017 point to overall economic resilience.