Effects of US Financial Meltdown on Philippine Banks
by Leo Reyes
The Central Bank of the Philippines assured the investing public and bank clients that the banking system in the Philippines is safe despite of the major finanacial fiasco caused by the sudden closure of Lehman Brothers, a major US investment bank.
The Central Bank's anouncement was indeed timely, considering that some major banks in the Philippines are known to have substantial monetary exposure with Lehman Brothers. It turned out however that only a few domestic banks have minimal exposure with the failed investment company. It named Banco de Oro, Metrobank and RCBC as the major banks that have some investments in Lehman Brothers.
The three banks mentioned, admitted their investments in Lehman Brothers but they were quick to dispel rumors that such investments will cause panic among clients and creditors. These banks disclosed that they have sufficient resources to support heavy withdrawals from their clients, if indeed such an eventuality takes place.
The statement issued by the local banks was quickly corroborated by the Central Bank of the Philippines. The timely stsatement and assurance from the highest monetary authority have indeed prevented what could have been a disastrous bank run.
As of this time no unusual movement of deposits or placements have been recorded and it was assumed that the investing public have been adequately assured by the banks and monetary authorities about the soundness of the Philippine banking system.
Tags: Banks , Central Bank , Financial Institutions , Business
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