Why I'm thankful for the BSP ~ Pinoy Reviews

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Wednesday, October 1, 2008

Why I'm thankful for the BSP

We've all heard the news of banks and financial institutions in the US going down and then how Congress disapproved their bailout plan. In my opinion, I couldn't agree more with Congress. If you keep bailing ailing companies out, what are the chances that future companies would be careful in their dealing when they know that they have a net to catch them.

Now why did it happen to these financial institutions in the US and not here? It's because banks and financial institutions are not regulated over there. They can throw away their customer's money any way they please without anyone overseeing them. In the Philippines, we have the BSP to do that. If we were to suffer a real estate crisis would banks be affected? Yes but the effect is only minimal because the law provides that banks only invest in real estate to a certain percentage of their total assets. As long as these banks do not circumvent the law, the people's money will be safe.