MANILA, Philippines – Members of the Association of Southeast Asian Nations (Asean) have already begun discussions on banks wanting to operate outside of their home country following the finalization of a banking integration framework, the Bangko Sentral ng Pilipinas said.
“(Other members) have already started to discuss bilaterally with other Asean members. We also have initial (discussions with other members) but I still cannot reveal them because they are very preliminary,” central bank Governor Amando M. Tetangco Jr. said.
This came following the conclusion of an Asean Banking Integration Framework (ABIF) during a meeting of the member countries’ central bankers that ended on Saturday.
Tetangco said that a framework for a Qualified Asean Bank (QAB) has also been established during the meeting, which basically updated the ABIF agreed upon by member countries back in December.
“The framework would now allow a bank from any of the Asean members to operate within Asean but there will be conditions… Now the next step would be for governments to agree on a bilateral (accord),” Tetangco said.
This means that before any Asean bank could operate in another member’s jurisdiction, regulators from both countries would have to agree on a set of rules for the QAB.
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At the same time, Tetangco stressed that banks aiming to be a QAB should comply with international standards on capital and other financial reforms.
Among the ABIF’s objectives are creating strong and well-managed banks in the region, exposing the lenders to brisker competition and allowing them access to bigger markets.
The Asean central bankers have agreed to have at least one QAB operating in their jurisdiction by 2018, Tetangco said.
In a joint statement following the Asean finance ministers’ and central bank governors’ meeting last week, the regulators stressed the finalization of the ABIF represents a significant milestone for the region in working towards greater financial and economic integration.
“As Asean moves closer to the realization of the Asean Economic Community, ABIF will strengthen the other initiatives under the Asean Financial Integration Framework to provide an important enabling mechanism for ASEAN countries to accelerate the pace of regional financial integration, increase cross border trade and investment flows and thus harness the growth potential of the region,” the statement said.
