Benjamin Diokno, governor of Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, hopes that a new law to create ‘bad bank’ asset management companies will reduce non-performing loan (NPL) ratios in the Philippines and stabilize a system shocked by Covid-19.
It is a move with a lot of historical precedent in Asia, but is it necessary?
The Financial Institutions Strategic Transfer (FIST) Act was signed by president Rodrigo Duterte on February 16, and a period of consultation on its implementing rules and regulations concluded on February 25.
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