BSP: Key risk is mar­ket volatil­ity

Manila Bulletin - - Business -

Bangko Sen­tral ng Pilip­inas (BSP) Gov. Amando Te­tangco said yes­ter­day that the key risk to Philip­pine growth this year is fi­nan­cial mar­ket volatil­ity which could be stoked by Fed­eral Re­serve pol­icy ac­tion and the asyn­chro­nous pol­icy moves by other ma­jor cen­tral banks, par­tic­u­larly the Euro­pean Cen­tral Bank and the Bank of Ja­pan. Te­tangco told a busi­ness fo­rum that mar­ket volatil­ity is the im­me­di­ate threat be­cause it could have sec­on­dround im­pli­ca­tions. “Agents can in­cor­rectly per­ceive risk, and mis­price this, which can re­sult in over­shoot­ing in rates and have ad­verse in­ter­me­di­ate ef­fects on bal­ance sheets of cor­po­rates and banks,” the BSP gov­er­nor said. “This can also lead to fi­nan­cial sta­bil­ity pres­sures,” he added. (WSJ, Reuters)

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